FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Depreciation for Partial Periods
Norman Delivery Company purchased a new delivery truck for $51,000 on April 1, 2016. The truck is expected to have a service life of 5 years or 109,200 miles and a residual value of $3,480. The truck was driven 9,000 miles in 2016 and 11,700 miles in 2017. Norman computes
depreciation to the nearest whole month.
Required:
1. Compute depreciation expense for 2016 and 2017 using the
For interim computations, carry amounts out to two decimal places. Round your final answers to the nearest dollar.
a. Straight-line method
2016
2017
b. Sum-of-the-years'-digits method
2016
2017
%24
c. Double-declining-balance method
2016
2017
2$
d. Activity method
2016
2017
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Transcribed Image Text:Depreciation for Partial Periods Norman Delivery Company purchased a new delivery truck for $51,000 on April 1, 2016. The truck is expected to have a service life of 5 years or 109,200 miles and a residual value of $3,480. The truck was driven 9,000 miles in 2016 and 11,700 miles in 2017. Norman computes depreciation to the nearest whole month. Required: 1. Compute depreciation expense for 2016 and 2017 using the For interim computations, carry amounts out to two decimal places. Round your final answers to the nearest dollar. a. Straight-line method 2016 2017 b. Sum-of-the-years'-digits method 2016 2017 %24 c. Double-declining-balance method 2016 2017 2$ d. Activity method 2016 2017
2017
d. Activity method
2016
2017
2$
2. For each method, what is the book value of the machine at the end of 2016? At the end of 2017?
(Round your answers to the nearest dollar.)
a. Straight-line method
2016
2017
b. Sum-of-the-years'-digits method
2016
2017
c. Double-declining-balance method
2016
2017
d. Activity method
2016
2017
2$
3. The book value of the asset in the early years of the asset's service will be
under an accelerated method as compared to the straight-line method. The
method is appropriate when the service life of the asset is affected primarily by the amount
the asset is used.
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Transcribed Image Text:2017 d. Activity method 2016 2017 2$ 2. For each method, what is the book value of the machine at the end of 2016? At the end of 2017? (Round your answers to the nearest dollar.) a. Straight-line method 2016 2017 b. Sum-of-the-years'-digits method 2016 2017 c. Double-declining-balance method 2016 2017 d. Activity method 2016 2017 2$ 3. The book value of the asset in the early years of the asset's service will be under an accelerated method as compared to the straight-line method. The method is appropriate when the service life of the asset is affected primarily by the amount the asset is used.
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