Question

Speedy Delivery Company purchases a delivery van for $31,200. Speedy estimates that at the end of its four-year service life, the van will be worth $5,600. During the four-year period, the company expects to drive the van 128,000 miles.

Actual miles driven each year were 35,000 miles in year 1 and 39,000 miles in year 2.

  

Required:

Calculate annual depreciation for the first two years of the van using each of the following methods. (Do not round your intermediate calculations.)

  
1. Straight-line.

Year	Annual Depreciation
1
2

2. Double-declining-balance.

Year	Annual Depreciation
1
2

   
3. Activity-based.

Year	Annual Depreciation
1
2

Answer 1