On Jan 1, 20012, Jen & Berrys Ice Cream Co. purchased a new fleet of...
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Accounting
On Jan 1, 20012, Jen & Berrys Ice Cream Co. purchased a new fleet of delivery trucks for a total of $500,000. The estimated life of the trucks is 8 years. During those 8 years it is expected that the trucks can be driven a total of 800,000 miles. The total estimated residual value is $100,000.
Compute the depreciation expense on the fleet of trucks in 2012 and 2013 using the Straight Line and 200% Declining-Balance methods. Also calculate the 2012 and 2013 depreciation using the Units of Output Method if the trucks are driven a total of 80,000 miles in 2012 and 120,000 miles in 2013.
Finally, indicate which depreciation method would give Jen & Berrys the largest profits in 2012.
Answers:
| Method | 2012 Depreciation Expense | 2013 Depreciation Expense |
| Straight Line |
|
|
| 200% Declining |
|
|
| Units of Output |
|
|
Depreciation method giving Jen & Berrys the largest profits in 2012:___________________
Briefly Explain Why:
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