Chubbyville purchases a delivery van for $22,800. Chubbyville estimates a four-y

Question

Chubbyville purchases a delivery van for $22,800. Chubbyville estimates a four-year service life and a residual value of $2,400. During the four-year period, the company expects to drive the van 109,000 miles. 1. Straight-line. Depreciation expense 2. Double-declining-balance. (Round your depreciation rate to 2 decimal places. Round your final answers to the nearest whole dollar.) End of Year Amounts r Depreciation Accumulated Rook Value ExpenseDepreciation Book Value Year 2 4 Total 3. Actual miles driven each year were 24,000 miles in Year 1;29,000 miles in Year 2; 20,000 miles in Year 3; and 26,000 miles in Year 4. Note that actual total miles of 99,000 fall short of expectations by 10,000 miles. Calculate annual depreciation for the four-year life of the van using activity-based. (Round your final answers to the nearest whole dollar.) End of Year Amounts Depreciation Accumulated Book Value Expense Depreciation 2 4 Total

Explanation / Answer

a) Straight line = (22800-2400/4) = 5100 per year

b) Double decline balance :

C) Unit of production method :

Year Depreciation expense Accumlated depreciation Book value 1 11400 11400 11400 2 5700 17100 5700 3 2850 19950 2850 4 450 20400 2400 Total 20400

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