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On January 1, 2020, Fast Delivery Transportation Company purchased a used aircraft at a cost...

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Accounting

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On January 1, 2020, Fast Delivery Transportation Company purchased a used aircraft at a cost of $56,300,000. Fast Delivery expects the plane to remain useful for five years (5,000,000 miles) and to have a residual value of $4,300,000. Fast Delivery expects to fly the plane 700,000 miles the first year, 1,300,000 miles each year during the second, third, and fourth years, and 400,000 miles the last year. Read the requirements. 1. Compute Fast Delivery's depreciation for the first two years on the plane using the straight-line method, the units-of-production method, and the double-declining balance method. a. Straight-line method Using the straight-line method, depreciation is $ 10,400,000 for 2020 and $ 10,400,000 for 2021. b. Units-of-production method (Round the depreciation per unit of output to two decimal places to compute your final answers.) Using the units-of-production method, depreciation is 10.40 for 2020 and 10.40 for 2021

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