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Question - Little Town's Pizza bought a used Toyota delivery van on January 2, 2014, for $19,000. The van was expected to remain in service for four years (68,800 miles). At the end of its useful life, Little Town's officials estimated that the van's residual value would be S1,800. The van traveled 26,500 miles the first year, 23,000 miles the second year, 15,500 miles the third year, and 3,800 miles in the fourth year.
Requirements
1. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods.
2. Which method best tracks the wear and tear on the van?
3. Which method would Little Town's prefer to use for income tax purposes? Explain in detail why Little Town's prefers this method.
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