Question
Three different companies each purchased trucks on January 1, 2016, for $54,000. Each truck was expected...
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Three different companies each purchased trucks on January 1, 2016, for $54,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 75,000 miles in 2016, 60,000 miles in 2017, 50,000 miles in 2018, and 70,000 miles in 2019. Each of the three companies earned $41,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. |
| Answer each of the following questions. Ignore the effects of income taxes. |
1.
value:
10.00 points
Required information
| Required: |
| a-1. |
Calculate the net income for 2016? (Round your "Per Unit Cost" to 3 decimal places.) |
| a-2. |
Which company will report the highest amount of net income for 2016? |
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References
eBook & Resources
WorksheetLearning Objective: 08-02 Explain how straight-line depreciation affects financial statements.Learning Objective: 08-04 Explain how units-of-production depreciation affects financial statements.
Difficulty: 2 MediumLearning Objective: 08-03 Explain how double-declining-balance depreciation affects financial statements.
Check my work
2.
value:
10.00 points
Required information
| b-1. |
Calculate the net income for 2019? (Round your "Per Unit Cost" to 3 decimal places.) |
| b-2. |
Which company will report the lowest amount of net income for 2019? |
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|
3.
value:
10.00 points
Required information
| c-1. |
Calculate the book value on the December 31, 2018, balance sheet? (Round your "Per Unit Cost" to 3 decimal places.) |
| c-2. |
Which company will report the highest book value on the December 31, 2018, balance sheet? |
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