ILC purchases a truck for the delivery of its products. The truck was purchased for ($90,077),...

 

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ILC purchases a truck for the delivery of its products. The truck was purchased for ($90,077), it is estimated to have 10,000$ salvage value and 3 years of useful life. The manager will like to know what will be the depreciation expense for the following 3 years under each of the different methods of depreciation: Straight-line Declining-balance Units-of-activity Sum-of-the-digits For the declining-balance method, the company uses the double-declining rate. For the units-of- activity method, total miles are expected to be 110,000. Actual miles of use in the first 3 years were: 2012, 27,500; 2013, 40,000; and 2014, 39,500. Instructions: Prepare a schedule of depreciation for each of the three method, showing the depreciation expense, accumulated depreciation and book value for each year. ILC purchases a truck for the delivery of its products. The truck was purchased for ($90,077), it is estimated to have 10,000$ salvage value and 3 years of useful life. The manager will like to know what will be the depreciation expense for the following 3 years under each of the different methods of depreciation: Straight-line Declining-balance Units-of-activity Sum-of-the-digits For the declining-balance method, the company uses the double-declining rate. For the units-of- activity method, total miles are expected to be 110,000. Actual miles of use in the first 3 years were: 2012, 27,500; 2013, 40,000; and 2014, 39,500. Instructions: Prepare a schedule of depreciation for each of the three method, showing the depreciation expense, accumulated depreciation and book value for each year.

Answer rating: 100% (QA)

Straightline method Depreciation expense per year Cost Salvage value Useful life Depreciation expens... View the full answer