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Question - Cheers Delivery Company purchased a new delivery truck for $39,000 on April 1, 2019. The truck is expected to have a service life of 5 years or 150,000 miles and a residual value of $3,000. The truck was driven 12,000 miles in 2019 and 16,000 miles in 2020. Cheers computes depreciation expense to the nearest whole month.
Required - Compute depreciation expense for 2019 and 2020 using the following methods:
1. Straight-line method
2. Sum-of-the-years'-digits method
3. Double-declining-balance method
2. For each method, what is the book value of the machine at the end of 2019? At the end of 2020?
4. Activity method
a. traditional volume-based methods are easier to use and less costly to implement and maintain. b. traditional
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