Difference in the amounts

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On March 1, Jarvis Realty spent $16,400 for a new company car with an estimated life of 4 years and an estimated scrap value of $3,500. Jarvis Realty elected to use the straight-line method for depreciation. On the same date, Carter Realty bought an identical car at the same price and also estimated the car's life and scrap value to be 4 years and $3,500, respectively. Carter Realty, however, chose the sum-of-the-years-digits method for depreciation.

a. At the end of the first year (10 months of use) and second year, how much depreciation did each company calculate? Do not round interim calculations. Round final answers to the nearest dollar.


Year 1

Year 2

Jarvis

$

$

Carter

$

$

b. At the end of the second year, which company had more recorded accumulated depreciation, and what was the difference in the amounts?

c. At the end of the fourth year, Carter Realty will have recorded more accumulated depreciation than Jarvis Realty.

Reference no: EM13972946

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