Flower Power, Inc purchases a van for making deliveries for $24,400. The company estimates a four-year service life and a residual value of $1,900. During the four-year period, the company expects to drive the van 108,000 miles. Calculate annual depreciation for the four-year life of the van using each of the following methods. 1. Straight-line. deprediation expense: _________ 2. Double-declining-balance. (Round your depreciation rate to 2 decimal places. Round your final answers to the nearest whole dollar.) year|. depreciation expence| accum. depreciation| book value 1 2 3 4 total 3. Actual miles driven each year were 18,000 miles in Year 1; 32,000 miles in Year 2; 24,000 miles in Year 3; and 25,000 miles in Year 4. Note that actual total miles of 99,000 fall short of expectations by 9,000 miles. Calculate annual depreciation for the four-year life of the van using activity-based. (Round your depreciation rate to 2 decimal places.) year|. depreciation expence| accum. depreciation| book value 1 2 3 4 total
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Flower Power, Inc purchases a van for making deliveries for $24,400. The company estimates a four-year service life and a residual value of $1,900. During the four-year period, the company expects to drive the van 108,000 miles. Calculate annual
1. Straight-line.
deprediation expense: _________
2. Double-declining-balance. (Round your depreciation rate to 2 decimal places. Round your final answers to the nearest whole dollar.)
year|. depreciation expence| accum. depreciation| book value
1
2
3
4
total
3. Actual miles driven each year were 18,000 miles in Year 1; 32,000 miles in Year 2; 24,000 miles in Year 3; and 25,000 miles in Year 4. Note that actual total miles of 99,000 fall short of expectations by 9,000 miles. Calculate annual depreciation for the four-year life of the van using activity-based. (Round your depreciation rate to 2 decimal places.)
year|. depreciation expence| accum. depreciation| book value
1
2
3
4
total
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