On January 1, 2013, the Excel Delivery Company purchased a delivery van for $41,

Question

On January 1, 2013, the Excel Delivery Company purchased a delivery van for $41,000. At the end of its five-year service life, it is estimated that the van will be worth $5,000. During the five-year period, the company expects to drive the van 100,000 miles.

   

Calculate annual depreciation for the five-year life of the van using each of the following methods. (Do not round intermediate calculations.)

    

     

     

     

Required:

Calculate annual depreciation for the five-year life of the van using each of the following methods. (Do not round intermediate calculations.)

Explanation / Answer

1. Annual Depreciation = $(41000 - 5000) / 5 = $7200

2. Sum of years digits = 5+4+3+2+1 = 15

3. Straight line rate = 100/5 = 20%

Double ceclining rate = 2*20% = 40%

4.

Year Depreciation 2013 5/15*36000 = 12000 2014 4/15*36000 = 9600 2015 3/15*36000 = 7200 2016 2/15*36000 = 4800 2017 1/15*36000 = 2400 Total $36000

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

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