Johnston, Inc. purchased a truck on April 1, 2019, to use for deliveries and is...
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Johnston, Inc. purchased a truck on April 1, 2019, to use for deliveries and is attempting to determine how much depreciation expense would be recognized under the two different methods. The truck cost $65,000 and is expected to have a salvage value of $15,000 at the end of its five-year life. Instructions a) Determine the amount of depreciation expense that will be recognized under each of the following depreciation methods. 1. Straight-line. (8 points) 2. Double-declining-balance. (8 points) b) Assume that Johnston, Inc. sells the truck on December 31, 2023, for $15,000 cash. Compute the resulting gain or loss from this sale under each of the depreciation methods used in part a. (4 points)
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