In: Accounting
AA purchased a van (cost: $50,000, salvage value: $5,000, useful life: 5 years).
1. Under straight-line method, how much is the book value at the end of 3rd year of its useful life?
$18,000
$20,000
$23,000
$27,000
2. Under double-declining balance method, how much is the book value at the end of 5thyear?
$2,333
$5,432
$6,221
None of the above
3. Under sum-of-years’ digits method, how much is the accumulated depreciation at the end of 3rd year?
4. Under sum-of-years’ digits method, how much is the annual depreciation expense for 2ndyear?
5. AA estimated the total usage of this van would be 100,000 miles. During the first year, this van was used for 30,000 miles. What is the amount of book value at the end of 1st year?