AA purchased a van (cost: $50,000, salvage value: $5,000, useful life: 5 years). 1. Under straight-line...

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 3^rd 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 5^thyear?

$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 3^rd year?

4. Under sum-of-years’ digits method, how much is the annual depreciation expense for 2^ndyear?

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 1^st year?

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Expert Solution

ekkarill92 answered 3 months ago

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