Compute the depreciation for each of the three years

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Reference no: EM131262278

Renner Corporation purchased a delivery van for $26,300 in 2014. The van was expected to have a useful life of 160,000 miles and a salvage value of $2,300. Actual mileage was as follows: 2014 50,000 2015 45,000 2016 47,000 Required a. Compute the depreciation for each of the three years, assuming the use of units-of-production depreciation. (Round "Cost per mile" answers to 2 decimal places.) b. The firm’s financial condition immediately prior to the purchase is shown in the following horizontal statements model. Assume that Renner earns $23,000 of cash revenue during 2014. Record the purchase of the van and the recognition of the revenue and the depreciation expense for the first year in a financial statements model like the one shown below. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), a financing activity (FA) and net change in cash (NC). The letters NA indicate that an element is not affected by the event. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) c. Assume that Renner sold the van at the end of the third year for $6,200. Calculate the amount of gain or loss from the sale. (Loss amounts should be indicated with a minus sign.)

Reference no: EM131262278

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