143. Chubbyville
purchases a delivery van for $23,500. Chubbyville estimates that at
the end of its four-year service life, the van will be worth
$2,500. During the four-year period, the company expects to drive
the van 105,000 miles. Calculate annual depreciation for the
four-year life of the van using each of the following methods.
Round all amounts to the nearest dollar.
1. Straight line.
2. Double-declining-balance.
3. Activity-based.
Actual miles driven each year were 24,000 miles in Year 1; 26,000
miles in Year 2; 22,000 miles in Year 3; and 25,000 miles in Year
4. Note that actual total miles of 97,000 fall short of
expectations by 8,000 miles.
150. Strawberry Fields purchased a tractor at a cost of $38,000 and sold it two years later for $25,000. Strawberry Fields recorded depreciation using the straight-line method, a five-year service life, and an $8,000 residual value. What was the gain or loss on the sale? Record the sale.
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