Part 8 of 8 Question 3, SF10-4 (simi... Homework: We... HW Score: 43.2%, 10.8 of 25 points Save Points: 0.8 of 1 On Janu

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Part 8 Of 8 Question 3 Sf10 4 Simi Homework We Hw Score 43 2 10 8 Of 25 Points Save Points 0 8 Of 1 On Janu 1 (86.41 KiB) Viewed 105 times

Part 8 of 8 Question 3, SF10-4 (simi... Homework: We... HW Score: 43.2%, 10.8 of 25 points Save Points: 0.8 of 1 On January 1, 2024, Air Asia purchased a used airplane at a cost of $65,000,000. Air Asia expects the plane to remain useful for eight years (5,000,000 miles) and to have a residual value of $5,000,000 Air Asia expects the plane to be flown 1,200,000 miles the first year and 1,400,000 miles the second year Read the requirements Requirement 1a. Compute second-year (2025) depreciation expense on the plane using the straight-line method Begin by selecting the formula to calculate the company's second-year depreciation expense on the plane using the straight-line method. Then enter the amounts and calculate the depreciation expense for the second year Cost Residual value ) Useful life Straight-line depreciation 65,000,000 5 5,000,000 ) 8 S 7.500,000 Requirement 1b. Compute second-year (2025) depreciation expense on the plane using the units-of-production method Before calculating the second-year depreciation expense on the plane using the units-of-production method, calculate the depreciation expense per unit Select the formula, then enter the amounts and calculate the depreciation expense per unit Cost Residual value + Useful life in units Depreciation per unit (5 65,000,000 5 5,000,000 + 5,000,000 = $ 12 Now, select the formula, enter the amounts and calculate the company's second-year depreciation expense on the plane using the units-of-production method Depreciation per unit Current year usage Units-of-production depreciation 5 12 1.400,000 $ 16,800,000 Requirement 1c. Compute second-year (2025) depreciation expense on the plane using the double declining balance method Begin by selecting the formula to calculate the company's second-year depreciation expense on the plane using the double-declining balance method. Then enter the amounts and calculate the depreciation expense for the second year Double-declining Cost Accumulated depreciation > 2*(1 - Useful life) = balance depreciation (5 65,000,000 $ 16.250,000 ) 2*(1-3) 12,187,500 Requirement 2. Calculate the balance in Accumulated Depreciation at the end of the second year for all three methods Straight-Line Units of production Double declining balance Depreciation Expense -2024 $ 7,500,000 $ 14,400,000 $ 16,250,000 Depreciation Expense - 2025 7,500,000 15,800,000 12.187.500 $ Accumulated Depreciation ending balance 15,000,000 S 31,200,000 $ 28,437,500