Homework Answers
1.
a.
Straight line method depreciation = ($46,700,000 - $4,700,000) / 5 = $8,400,000 per year
1st years: $8,400,000
2nd year: $8,400,000
b.
Depreciation per mile = ($46,700,000 - $4,700,000) / 6,800,000 = $6.18 per mile
1st year: 700,000 X $6.18 = $4,326,000
2nd year: 1,650,000 X $6.18 = $10,197,000
c.
Depreciation rate = (100 / 5) X 2 = 40%
1st year = $46,700,000 X 40% = $18,680,000
2nd year = ($46,700,000 - $18,680,000) X 40% = $11,208,000
2.
Book value at the end of 1st year:
Straight line method: $46,700,000 - $8,400,000 = $38,300,000
Units of production: $46,700,000 - $4,326,000 = $42,374,000
Double declining: $46,700,000 - $18,680,000 = $28,020,000
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On January 1, 2017, Best Shipping Transportation Company purchased a used aircraft at a cost of...
On January 1, 2017, Best Shipping Transportation Company purchased a used aircraft at a cost of...
On January 1, 2017, Best Shipping Transportation Company purchased a used aircraft at a cost of $46,300,000. Best Shippin Best Shipping expects to fly the plane 835,000 miles the first year, 1,225,000 miles each year during the second, third, and fou Read the requirements. 1. Compute Best Shipping's depreciation for the first two years on the plane using the straight-line method, the units-of-produa a. Straight-line method Using the straight-line method, depreciation is $ for 2017 and $ for 2018 b....
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