On Jan 1, 20012, Jen & Berrys Ice Cream Co. purchased a new fleet of...
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Accounting
On Jan 1, 20012, Jen & Berrys Ice Cream Co. purchased a new fleet of delivery trucks for a total of $500,000. The estimated life of the trucks is 8 years. During those 8 years it is expected that the trucks can be driven a total of 800,000 miles. The total estimated residual value is $100,000.
Compute the depreciation expense on the fleet of trucks in 2012 and 2013 using theStraight Lineand200% Declining-Balance methods. Also calculate the 2012 and 2013 depreciation using theUnits of Output Methodif the trucks are driven a total of 80,000 miles in 2012 and 120,000 miles in 2013.
Finally, indicate which depreciation method would give Jen & Berrys the largest profits in 2012.
Answers:
Method
2012 Depreciation Expense
2013 Depreciation Expense
Straight Line
200% Declining
Units of Output
Depreciation method giving Jen & Berrys the largest profits in 2012:___________________
Briefly Explain Why:
Answer & Explanation
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