Bar Delivery Company purchased a new delivery truck for $51,000 on April 1, Year 1...
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Bar Delivery Company purchased a new delivery truck for $51,000 on April 1, Year 1 . The truck is expected to have a service life of 10 years or 180,000 miles and a residual value of $3,000. The truck was driven 10,000 miles in Year 1 and 16,000 miles in Year 2. Bar computes depreciation expense to the nearest whole month. Required: 1. Compute depreciation expense for Year 1 and Year 2 using the following methods: (Round your answers to the nearest dollar.) a. Straight-line method Year 1$ Year 2$ b. Sum-of-the-years'-digits method Year 1 \$ Year 2$ c. Double-declining-balance method Year 1$ Year 2$ d. Activity method Year 1$ Year 2$ 2. For each method, what is the book value of the machine at the end of Year 1? At the end of Year 2? (Round your answers to the nearest dollar.) a. Straight-line method Year 1$ Year 2$ b. Sum-of-the-years'-digits method Year 1 \$ Year 2$ c. Double-declining-balance method Year 1$ Year 2$ d. Activity method Year 1 \$ Year 2$ 3. Next Level The book value of the asset in the early years of the asset's service will be under an accelerated method as compared to the straightline method. The method is appropriate when the service life of the asset is affected primarily by the amount the asset is used
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Bar Delivery Company purchased a new delivery truck for $51,000 on April 1, Year 1 . The truck is expected to have a service life of 10 years or 180,000 miles and a residual value of $3,000. The truck was driven 10,000 miles in Year 1 and 16,000 miles in Year 2. Bar computes depreciation expense to the nearest whole month. Required: 1. Compute depreciation expense for Year 1 and Year 2 using the following methods: (Round your answers to the nearest dollar.) a. Straight-line method Year 1$ Year 2$ b. Sum-of-the-years'-digits method Year 1 \$ Year 2$ c. Double-declining-balance method Year 1$ Year 2$ d. Activity method Year 1$ Year 2$ 2. For each method, what is the book value of the machine at the end of Year 1? At the end of Year 2? (Round your answers to the nearest dollar.) a. Straight-line method Year 1$ Year 2$ b. Sum-of-the-years'-digits method Year 1 \$ Year 2$ c. Double-declining-balance method Year 1$ Year 2$ d. Activity method Year 1 \$ Year 2$ 3. Next Level The book value of the asset in the early years of the asset's service will be under an accelerated method as compared to the straightline method. The method is appropriate when the service life of the asset is affected primarily by the amount the asset is used 