Reference no: EM131105470
Assume that at the beginning of 2015 QuickAir purchased a used Jumbo 747 aircraft at a cost of $56,700,000.00. QuickAir expects the plane to remain useful for 5 years (5,000,000 miles) and to have a residual value of $4,700.000.
QuickAir expects to fly the plane for:
1st 775,000 miles the first year
2nd 1,200,000
3rd 1,200,000
4th 1,200,000
5th 625,000
Compute QuickAir's depreciation for the first two years on the plane using the following methods:
Straight-line method
Units-of-production method (round depreciation per mile to the closest cent)
Double-declining-balance method
Show the airplane's book value at the end of the first year under each depreciation method
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