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Assume that at the beginning of 2020, Porter Airlines purchased a Bombardier Q400 aircraft at a cost of $25,000,000. Porter expects the plane to remain useful for five years (5,000,000 km) and to have a residual value of $5,000,000. Porter expects the plane to be flown 750,000 km the first year and 1,250,000 km each year during years 2 through 4, and 500,000 km the last year. 1. Compute Porter’s first-year depreciation on the plane using the following methods: a. Straight-line b. Units-of-production c. Double-diminishing-balance (Why do you have to x by 2 for this answer?)

Assume that at the beginning of 2020, Porter Airlines purchased a Bombardier Q400 aircraft at a cost of $25,000,000. Porter expects the plane to remain useful for five years (5,000,000 km) and to have a residual value of $5,000,000. Porter expects the plane to be flown 750,000 km the first year and 1,250,000 km each year during years 2 through 4, and 500,000 km the last year. 1. Compute Porter’s first-year depreciation on the plane using the following methods: a. Straight-line b. Units-of-production c. Double-diminishing-balance (Why do you have to x by 2 for this answer?)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Assume that at the beginning of 2020, Porter Airlines purchased a Bombardier Q400 aircraft at a cost of $25,000,000. Porter expects the plane to remain useful for five years (5,000,000 km) and to have a residual value of $5,000,000. Porter expects the plane to be flown 750,000 km the first year and 1,250,000 km each year during years 2 through 4, and 500,000 km the last year.

1. Compute Porter’s first-year depreciation on the plane using the following methods:

a. Straight-line

b. Units-of-production

c. Double-diminishing-balance (Why do you have to x by 2 for this answer?)

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