ookmarks Window Help 100% Mon 4:28 PM Q E Caloulator A light car is purchased on

Question

ookmarks Window Help 100% Mon 4:28 PM Q E Caloulator A light car is purchased on January 1 at a cost of $25,300. It is expected to serve ftor eight years and have a salvage value of $3,000. It is expectesd to be used for 96,000 miles over its eight-year useful life. Using the units-of-production method, calculate the depreciation expense for the first and third years of use if the car is driven 20,000 miles in year 1 and 18,000 miles in year 3. Round interim calculations to two decimal places Depreciation Expense Year 1 Year 3 Previous 20

Explanation / Answer

Depreciation Expenses Per Mile = (Cost - salvage Value)/Life in Number of Units = ($25,300 - $3,000)/95,000 = 0.2347 Year 1 $4,695 Year 3 $4,225

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