On January 1, 2025, a corporation acquired a truck for $60,000. Residual value was estimated to be $20,000. The truck can be driven for 90,000 miles or a useful life of four years. What is the book value at the end of year 2, calculated by the straight-line method? ⒸA. $30,000 OB. $40,000 OC. $50,000 OD. $15,000 4

On January 1, 2025, a corporation acquired a truck for $60,000. Residual value was estimated to be $20,000. The truck can be driven for 90,000 miles or a useful life of four years. What is the book value at the end of year 2, calculated by the straight-line method? ⒸA. $30,000 OB. $40,000 OC. $50,000 OD. $15,000 4

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 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...

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Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.
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