A company purchased three cars at $3150 each on Apirl 2, 2003. Depreciation is to be computed
Question:
A company purchased three cars at $3150 each on Apirl 2, 2003. Depreciation is to be computed on a mileage basis. The estimated milage to be considered is 50,000 miles, with a trade in value of 650 for each car.
After having driven 8400 miles car #1 was completely destroyed on Nov 23, 2003 and not replaced. The ins co pd 2500 for the loss.
As of Dec 31, 2003 of the two remaining cars, car #2 had been driven 10300 miles and car #3 was driven 11500 miles.
On July 10,2004 after having been driven a total of 24600 miles, Car #2 was sold for 1800.
Car #3 after having been driven a total of 27800 miles was traded in on Dec 28,2004 for a new car (#4) that had a list price of 3000. On the purchase of car #4 the dealer allowed a trade in value of 1850
a. The balance in the Allowance for Depreciation account at Dec 31, 2003 is:
b. The depreciation expense for the calendar year 2004 is:
c. The book value of the new car (#4) using the income tax method is:
