Assume you have a flower shop and you bought a delivery van for $34,000. You expect the
Question:
Assume you have a flower shop and you bought a delivery van for
$34,000.
You expect the van to remain in service for three years
(138,000 km).
At the end of its useful life, you estimate that the van's residual value will be
$880.
You estimate the van will travel
36,000
km the first year,
56,000
km the second year, and
46,000
km the third year. fill an estimate of the depreciation expense per year for the van under the three depreciation methods. Show your computations.
Which method do you think tracks the useful life cost on the van most closely? How does management determine which depreciation method to use?
Begin by calculating straight-line depreciation expense for each year. (Round the amounts for depreciation expense to the nearest whole dollar.)
( | - | ) | / | = | Depreciation expense | |||||
Year 1 | ( | - | ) | / | = | |||||
Year 2 | ( | - | ) | / | = | |||||
Year 3 | ( | - | ) | / | = |
Financial Accounting
ISBN: 978-0133472264
5th Canadian edition
Authors: Charles Horngren, William Thomas, Walter Harrison, Greg Berberich, Catherine Seguin