Calculate annual depreciation for the four-year life of the

Reference no: EM13483333

Speedy Delivery Company purchases a delivery van for $31,000. Speedy estimates that at the end of its four-year service life, the van will be worth $4,600. During the four-year period, the company expects to drive the van 100,000 miles

Actual miles driven each year were 30,000 miles in year 1; 32,000 miles in year 2; 28,000 miles in year 3; and 16,000 miles in year 4. Note that actual total miles of 106,000 exceed expectations by 6,000 miles

Required:Calculate annual depreciation for the four-year life of the van using each of the following methods. (Do not round intermediate calculations. Enter your answers for "Depreciation Rate" as numbers, not percentages, rounded to 3 decimal places.)

1.Straight-line.

Years 1,2,3,4 , Annual depreciation, year-end value

2.Double-declining-balance.

Years 1,2,3,4, beginning book value x depreciation rate = depreciation expense, accumulated depreciation, book value

3.Activity-based.

Years 1,2,3,4, miles driven x depreciation rate = depreciation expense, accumulated depreciation, book value.

Reference no: EM13483333

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