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chapter 9 discussion section problem

# chapter 9 discussion section problem - NAME TA ACC 3010...

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NAME _________________________________ T A _______________________________ ACC 3010 CHAPTER 9: PLANT ASSETS AND INTANGIBLES On January 8, 2012, Speedway Delivery Service purchased a truck at a cost of \$65,000. Before placing the truck in service, Speedway spent \$4,000 painting it, \$2,500 replacing tires, and \$8,000 overhauling the engine. The truck should remain in service for 5 years and have a residual value of \$6,000. The truck’s expected total mileage is 100,000 miles over its useful life. The truck’s actual annual mileage is expected to be: 20,000 – 2012, 22,000 – 2013, 21,000 – 2014, 22,000 – 2015, 21,000 – 2016. In deciding which depreciation method to use, David Greer, the general manager, requests a depreciation schedule for each of the depreciation methods (straight- line and units-of-production). He also has asked for schedules showing how the depreciation expense would change if the asset was purchased on May 1, 2012. Asset Cost: \$65,000 + \$4,000 + \$2,500 + \$8,000 = \$79,500

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