Reference no: EM132764336

Problem 1: On January 1, 2020 company ABC purchases a truck for $67,000, economic life is 6 years and useful life is 10 years, it has a residual value of $7,000 after it us used as a trade in. The truck has a 400,000 km life. The CFO wants you to the following analysis for depreciation determine the yearly amount for the first four years. (Show all the Calculations)

Year            Kilometer used            Working hours per year
2020             45,000                          2,400
2021            72,000                          3,600
2022             65,000                         3,200
2023              52,000                       2,900

A) Straight line depreciation over the life of then truck per year.
B) Unit of production: depreciation per year amount required.
C) Declining balance method of 25% per year, including the half year rule for the next four years, giving amount per year of depreciation.
D) Working hours depreciation.
E) Sum of the year's digits.
F) Double declining balance.