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Calculate the amount of amortization expense for the year

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Question - Lee Company purchased a truck on January 1, 2001 for $60,000. It is estimated that the equipment will have a $5,000 residual value at the end of its five-year useful life. It is also estimated that the equipment will travel 100,000 Kms over its five-year life.

a) Calculate the amount of amortization expense for the year ended December 31, 2001, using the double declining balance method of amortization.

b) If 16,000 Kms are traveled in 2001 and 24,000 Kms are traveled in 2002, what is the book value of the truck at December 31, 2002? The company uses the units-of-activity amortization method.

c) Calculate the amount of amortization expense for the year ended December 31, 2002, using the straight-line method of amortization.

Reference no: EM132578134

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