Answer Happy

On January 3, 2016, On Time Delivery Service purchased a truck at a cost of $75,000. Before placing the truck in service, On Time spent $4,000 painting it, $1,800 replacing tires, and $7,200 overhauling the engine. The truck should remain in service for five years and have a residual value of $10,000. The truck's annual mileage is expected to be 27,000 miles in each of the first four years and 12,000 miles in the fifth year—120,000 miles in total. In deciding which depreciation method to use, Andy Sargeant, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance). Read the requirements. Requirement 1. Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value. Begin by preparing a depreciation schedule using the straight-line method. Straight-Line Depreciation Schedule Asset Depreciation for the Year Depreciable Useful Depreciation Accumulated Cost Life Expense Depreciation Book Date Cost Value 1-3-2016 88000 88000 12-31-2016 12-31-2017 11 11 11 12-31-2018 12-31-2019 II 12-31-2020 1 II