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Question - Rural's Pizza bought a used Toyota delivery van on January 2, 2014 for $18,000. The van was expected to remain in service for four year (41,750 miles). At the end of its useful life, Rural's officials estimated that the van's residual value would be $1,300. The Van traveled 13,000 miles the first year, 11,250 the second year, 10,250 the third year and 7,250 in the fourth year.
Requirements:
• Prepare a schedule of depreciation expense per year for the van under the the three depreciation methods
• Which method best tracks the wear and tear on the van?
• Which method would Rural's prefer to use for income tax purpose? Explain in detail why Rural's prefers this method.
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