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What was the residual value of each aircraft

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Question 1 - Assume that Delta Air Lines purchased the following six aircraft (see Exhibit). What was the residual value of each aircraft and the first-year depreciation for each aircraft? (Use 25 years and residual values of 5% for 1993 through 2006 and 30 years and 10% of cost for 2007.) The useful life table in the Coursepack does call for a 20 year useful life for planes purchased in 1993, but please use 25 years).

Question 2 - Assume that each aircraft in Question 2 is still in Delta's fleet in 2007. How would you estimate the net book value of aircraft before application of "fresh start" accounting in 2007? How would this compare to the "fresh start" value that Delta estimated in 2007 as described in the notes from the consolidated financial statements included in the Form 10-K and the case?

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The paper is in relation to Depreciation Method being chosen by the company for the purpose of its own benefit. There are difference in method of depreciation from company to company because of the difference in the functions and operations.

Reference no: EM131570290

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