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The Sadie Company purchased a bus to transport its customers. The total cost of the bus is $34,000 with an estimated salvage value of $4,000. The useful life of the bus is 5 years and the bus is expected to operate for 100,000 miles. During the first year of operations, the bus operated for 12,000 miles.
REQUIRED
Problem a) Calculate the first year's depreciation expense under the following depreciation methods:
i. Straight-Lineii. Units of Productioniii. Double-Declining-Balance
Problem b) What are the book values for each of the individual years of useful life of the bus under the Double-Declining Balance Method?
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