Kleener Co. acquired a new delivery truck at the beginning of


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Kleener Co. acquired a new delivery truck at the beginning of its current fiscal year. The truck cost $30,000 and has an estimated useful life of four years and an estimated salvage value of $4,200. Requirement 1: (a) Calculate depreciation expense for each year of the truck’s life using Straight-line depreciation. (Omit the “$” sign in your response.) Depreciation expense $ per year (b) Calculate depreciation expense for each year of the truck’s life using Double-declining-balance depreciation. (Omit the “$” sign in your response.) Year Depreciation Expense 1 $ 2 $ 3 $ Requirement 2: Calculate the truck’s net book value at the end of its third year of use under each depreciation method. (Omit the “$” sign in your response.) Depreciation method Net book value Straight-line depreciation $ Double-declining-balance depreciation $ Requirement 3: Assume that Kleener Co. had no more use for the truck after the end of the third year and that at the beginning of the fourth year it had an offer from a buyer who was willing to pay $6,780 for the truck. Should the depreciation method used by Kleener Co. affect the decision to sell the truck? PresidentHackerSeaUrchin6849
posted a question ยท Feb 24, 2013 at 3:30pm

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