Reference no: EM132557869
Question - Charm Company purchased a new car for use in its business on January 1, 2017. It paid $30,000 for the car. Charm expects the car to have a useful life of four years with an estimated residual value of zero. Charm expects to drive the car as follows:
|
Year
|
Expected Miles Driven
|
|
2017
|
20,000
|
|
2018
|
45,000
|
|
2019
|
40,000
|
|
2020
|
15,000
|
|
Total
|
120,000
|
1. Using the? straight-line method of? depreciation, calculate the following amounts for the car for each of the four years of its expected? life:
a. Depreciation expense
b. Accumulated depreciation balance
c. Book value
2. Using the? Units-of-Production method of? depreciation, calculate the following amounts for the car for each of the four years of its expected? life:
a. Depreciation expense
b. Accumulated depreciation balance
c. Book value
3. Using the? Double-Declining-Balance method of? depreciation, calculate the following amounts for the car for each of the four years of its expected? life:
a. Depreciation expense
b. Accumulated depreciation balance
c. Book value
4. Using the? Double-Declining-Balance method of? depreciation, calculate the following and record the appropriate journal entry assuming all events occurred at end of 2018.
a. Assume the car was involved in an accident, damaged beyond repair, and disposed of.
b. Assume the car was involved in an accident and sold for $1,000.
c. Assume the car was limited edition and resold for $24,000.