Score: 0 of 11 pts 4 of 6 (0 complete) Hw Score: 0%, 0 of 50 pts S9-3 (similar t

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Score: 0 of 11 pts 4 of 6 (0 complete) Hw Score: 0%, 0 of 50 pts S9-3 (similar to) EQuestion Help At the beginning of the year, Air Canadians purchased a used airplane for $35,000,000. Air Canadians expects the plane to remain useful for five years (4,000,000 miles) and to have a residual value of $7,000,000. The company expects the plane to be flown 1,500,000 miles the first year Read the requirements. Requirement 1a. Compute Air Canadians's first-year depreciation expense on the plane using the straight-line method Begin by selecting the formula to calculate the company's first-year depreciation expense on the plane using the straight-line method. Then enter the amounts and calculate the depreciation for the first year. Straight-line depreciation Cost Current year usage Depreciation per unit Net book value Residual value Useful life Requirements 1. Compute Air Canadians's firsf-year depreciation expense on the plane using the following methods: 2. Show the airplane's book value at the end of the first year for all three methods. Print Done

Explanation / Answer

1) Calculate depreciation expense :

Straight line method :

Unit of proudction method :

Double decline balance :

Calculate book value at the end of first year :

Straight line dep = 3500000-5600000 =29400000

Unit of production = 35000000-10500000 = 24500000

Double decline rate = 35000000-14000000 = 21000000

Original cost - salvage value / useful life = depreciation expense 35000000 - 7000000 / 5 = 5600000

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