Compute austin airlines first-year depreciation expense

Reference no: EM131819944

Question: Computing first-year depreciation and book value At the beginning of the year, Austin Airlines purchased a used airplane for $33,500,000. Austin Airlines expects the plane to remain useful for five years (4,000,000 miles) and to have a residual value of $5,500,000. The company expects the plane to be flown 1,100,000 miles during the first year.

Requirements: 1. Compute Austin Airlines's first-year depreciation expense on the plane using the following methods:

a. Straight-line

b. Units-of-production

c. Double-declining-balance

2. Show the airplane's book value at the end of the first year for all three methods.

Reference no: EM131819944

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