In August 2024, Carla Vista Helicopters Ltd. purchased a new helicopter for its logging and heavy lift operations at a cost of $1.05 million. Based on past experience, management has determined that the helicopter will have a useful life of 18,000 flying hours, at which time it will have an estimated residual value of $150,000. During 2024, the helicopter was used for 1,800 flying hours, and in 2025 it was used for 2,000 flying hours. Carla Vista Helicopters has a December 31 year end and uses the units-of-production method of depreciation for its helicopters. Determine the depreciation expense on this helicopter for 2025 and its carrying amount at December 31, 2025. Depreciation expense $ Carrying amount $ 2025

In August 2024, Carla Vista Helicopters Ltd. purchased a new helicopter for its logging and heavy lift operations at a cost of $1.05 million. Based on past experience, management has determined that the helicopter will have a useful life of 18,000 flying hours, at which time it will have an estimated residual value of $150,000. During 2024, the helicopter was used for 1,800 flying hours, and in 2025 it was used for 2,000 flying hours. Carla Vista Helicopters has a December 31 year end and uses the units-of-production method of depreciation for its helicopters. Determine the depreciation expense on this helicopter for 2025 and its carrying amount at December 31, 2025. Depreciation expense $ Carrying amount $ 2025

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...

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Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for 120,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 23,000 miles. Calculate the annual depreciation expense.
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
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