chapter 7: × 9 Microsoft P × 0 2010 11th C × V O 2010 11th C × New Tab × Assignm
ID: 2543622 • Letter: C
Question
chapter 7: × 9 Microsoft P × 0 2010 11th C × V O 2010 11th C × New Tab × Assignment × y @ Do Home c × G how to calc × New Ta CSecure https://www.mathxl.com/Student/PlayerHomework.aspx?homeworkld 464746448&questionld-1;&flushed-false;&cld; 4838977¢erwin-yes; Sivana Arciniegas 1 3/14/18 11:14 3/14/18 11:14 PM 2010 S2018 10 am Homework: Chapter 7 Homework Score: 0 of 8 pts E7-25A (similar to) Save 2 of 4 (1 complete) Hw Score: 18.87%, 9.24 of 49 pts Question Help * Urban Pizza bought a used Toyota delivery van on January 2, 2016, for $19,200. The van was expected to remain in service for four years (71,200 miles). At the end of its useful life, Urban officials estimated that the van's residual value would be $1,400. The van traveled 28,000 miles the first year, 20,500 miles the second year, 18,500 miles the third year, and 4,200 miles in the fourth year. Requirements 1. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods. 2. Which method best tracks the wear and tear on the van? 3. Which method would Urban prefer to use for income tax purposes? Explain in detail why Urban would prefer this method Requirement 1. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods. (For units-of-production and double-declining-balance methods, round to the nearest two decimal places after each step of the calculation. For years with $0 depreciation, make sure to enter "O" in the appropriate column.) Year 2016 2017 2018 2019 Total Straight-Line Enter any number in the edit fields and then click Check Answer. Clear Al Check Answer remainingExplanation / Answer
Answer:
1)
Depreciation under straight line bases
Depreciation
= cost-salvage value/ life years
=19200-1400 /4 years
=$4450 depreciation each year
Year
Depreciation
1
4450
2
4450
3
4450
4
4450
Total
17800
_______________________________________________
2
Depreciation under Units-of-Production method
Depreciation
= cost-salvage value/ Miles run during the life time
=19200-1400 / 71200 mile
=$0.25 depreciation per mile
Year
Depreciation
Calculation
1
7000
28000*0.25
2
5125
20500*0.25
3
4625
18500*0.25
4
1050
4200*0.25
Total
17800
______________________________
3
Depreciation under Double declining method
DDB rate
=(100/4)x 2
=25%*2
=50% depreciation each year
Year
Dedication
1
9600
2
4800
3
2400
4
1000
Total
17800
Working for the answer:
Year
Opening
value
rate
Depriciation
Accumulated
Depreciation
Ending
value
A
B
C=A*B
1
19200
50%
9600
9600
9600
2
9600
50%
4800
14400
4800
3
4800
50%
2400
16800
2400
4
2400
50%
1000
17800
1400
________________________________________________________________________
2
Units of production tracks wear and tear on Van most closely
_______________________________________________________________________________
3
Double declining method is preferred for income tax purpose
Year
Depreciation
1
4450
2
4450
3
4450
4
4450
Total
17800
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.