Time-Factor Methods of Depreciation A delivery truck was acquired by Navarro Inc

Question

Time-Factor Methods of Depreciation

A delivery truck was acquired by Navarro Inc. for $40,000 on January 1, 20Y1. The truck was estimated to have a three-year life and a trade-in value at the end of that time of $10,000. The following depreciation methods are being considered:

Depreciation is to be calculated by the straight-line method.

Depreciation is to be calculated by the sum-of-the-years’-digits method.

Depreciation is to be calculated by the double-declining-balance method.

a. Prepare a table reporting periodic depreciation and asset book value over a three-year period for the straight-line method.

Navarro Inc.

Straight-line Depreciation Calculation

Depreciation

Accumulated
Depreciation

Asset
Book Value

$

20Y1

$

$

20Y2

20Y3

Total

$

b. Prepare a table reporting periodic depreciation and asset book value over a three-year period for the sum-of-the-years'-digits method. Round interim calculations to five decimal places and final answer to the nearest dollar.

Navarro Inc.

Sum-of-the-years'-digits Depreciation Calculation

Depreciation

Accumulated
Depreciation

Asset
Book Value

$

20Y1

$

$

20Y2

20Y3

Total

$

c. Prepare a table reporting periodic depreciation and asset book value over a three-year period for the double-declining-balance method. Round percentage values in the intermediate calculations to one decimal place.

Navarro Inc.

Double-declining-balance Depreciation Calculation

Depreciation

Accumulated
Depreciation

Asset
Book Value

$

20Y1

$

$

20Y2

20Y3

Total

$

Hide

a. Prepare a table reporting periodic depreciation and asset book value over a three-year period for the straight-line method.

Navarro Inc.

Straight-line Depreciation Calculation

Depreciation

Accumulated
Depreciation

Asset
Book Value

$

20Y1

$

$

20Y2

20Y3

Total

$

Explanation / Answer

a) Straight line method :

b) Sum of year digit method :

c) Double decline balance

Depreciation Accumlated dep Asset book value 40000 20Y1 10000 10000 30000 20Y2 10000 20000 20000 20Y3 10000 30000 10000 Total 30000

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.