New York Limousine Service owns 10 limos and uses the units-of-productionmethod in computing depreciations on its limos. Each limo costing $32,000 isexpected to be driven 200,000 miles and is expected to have a salvage value of $3,000. Limo #1 was driven 24,000 miles in year 1 and 28,000 miles in year 2. Determine the depreciation for each year and the book value at the end of year 2.

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A: 1. DEPRECIABLE VALUE :  = COST - SALVAGE VALUE  = $14,000 - $2,000 = $12,000   2. DEPRECIATION…

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A:

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Q: Which method is favorable for tax advantage and explain through calculation?

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