Kleener Co. acquired a new delivery truck at the beginning of its current fiscal

Question

Kleener Co. acquired a new delivery truck at the beginning of its current fiscal year. The truck cost $26,000 and has an estimated useful life of four years and an estimated salvage value of $4,000.

(a)

Calculate depreciation expense for each year of the truck's life using Straight-line depreciation. (Omit the "$" sign in your response.)

(b)

Calculate depreciation expense for each year of the truck's life using Double-declining-balance depreciation.(Omit the "$" sign in your response.)

Kleener Co. acquired a new delivery truck at the beginning of its current fiscal year. The truck cost $26,000 and has an estimated useful life of four years and an estimated salvage value of $4,000.

Explanation / Answer

Hi, Please find the calculations as follows: Depr Expense as SLM = (26000 - 4000)/4 = 5500 % for DDL method = 5500/22000 = 25% *2 = 50% Depr Expen as per DDL Year1= 26000*.50 = 13000 Year2 = (26000 - 13000)*.50 = 6500 Year3 = (26000 - 13000 - 6500)*50 = 3250 Requirement 2 SLM = 26000 - 5500*3 = 9500 DDL = 26000 - 13000 - 6500 -3250 = 3250 Thanks, Aman

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