Lightning Delivery Company purchased a new delivery truck for $45,000 on April 1, 2019. The truck is expected to have a service life of 10 years or 120,000 miles and a residual value of $3,000. The truck was driven 10,000 miles in 2019 and 13,000 miles in 2020. Lightning computes depreciation expense to the nearest whole month. Required: Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar. Sum-of-the-years'-digits method Double-declining-balance method Activity method. 2. For each method, what is the book value of the machine at the end of 2019? At the end of 2020? (Round your answers to the nearest dollar. Sum-of-the-years'-digits method Double-declining-balance method Activity method

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 10E: Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual...
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Lightning Delivery Company purchased a new delivery truck for $45,000 on April 1, 2019. The truck is expected to have a service life of 10 years or 120,000 miles and a residual value of $3,000. The truck was driven 10,000 miles in 2019 and 13,000 miles in 2020. Lightning computes depreciation expense to the nearest whole month.

Required:

  1. Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.

Sum-of-the-years'-digits method

Double-declining-balance method

Activity method.

2. For each method, what is the book value of the machine at the end of 2019? At the end of 2020? (Round your answers to the nearest dollar.

Sum-of-the-years'-digits method

Double-declining-balance method

Activity method.

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