Requirements 1. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods. 2. Which method best tracks the wear and tear on the van? 3. Which method would Tasty Tongue prefer to use for income tax purposes? Explain in detail why Tasty Tongue prefers this method.
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- Southern Pizza bought a used Ford delivery van on January 2, 2021, for $23,000. The van was expected to remain in service for four years (102.000 miles). At the end of its useful life, Southern management estimated that the van's residual value would be $2,600. The van traveled 40,000 miles the first year, 33,000 miles the second year, 18,000 miles the third year, and 11,000 miles in the fourth year Read the requirements Requirement 1. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods Prepare a schedule of depreciation expense per year for the van under the straight-line method. (Complete all input fields Enter a 0 for any zaro balances) Straight-Line Year 2021 2022 2023 2024 TotalRural Pizza bought a used Ford delivery van on January 2, 2021, for $20,000. The van was expected to remain in service for four years (45,000 miles). At the end of its useful life, Rural management estimated that the van's residual value would be $2,000. The van traveled 17,000 miles the first year, 18,000 miles the second year, 5,000 miles the third year, and 5,000 miles in the fourth year. Read the requirements Requirement 1. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods. Prepare a schedule of depreciation expense per year for the van under the straight-line method. (Complete all input fields. Enter a 0 for any zero balances.) Year Straight-Line 2021 2022 2023 2024 TotalDeluxe Pizza bought a used Ford delivery van on January 2, 2021, for $20,200. The van was expected to remain in service for four years (92,500 miles). At the end of its useful life, Deluxe management estimated that the van's residual value would be $1,700. The van traveled 32,000 miles the first year, 21,000 miles the second year, 20,000 miles the third year, and 19,500 miles in the fourth year. Read the requirements. Requirement 1. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods. Prepare a schedule of depreciation expense per year for the van under the straight-line method. (Complete all input fields. Enter a 0 for any zero balances.) Year 2021 Straight-Line 2022 2023 2024 Total Question Viewer
- Benson Freight Company owns a truck that cost $47,000. Currently, the truck’s book value is $22,000, and its expected remaining useful life is five years. Benson has the opportunity to purchase for $30,300 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $7,000 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $19,000.RequiredCalculate the total relevant costs. Should Benson replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out?Perez Freight Company owns a truck that cost $46,000. Currently, the truck's book value is $23,000, and its expected remaining useful life is four years. Perez has the opportunity to purchase for $31,300 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $5,700 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $15,000. Required Calculate the total relevant costs. Should Perez replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Replace With Keep Old New Total relevant costs Should Perez replace or continue the old truck?Finch Freight Company owns a truck that cost $36,000. Currently, the truck's book value is $29,000, and its expected remaining useful life is five years. Finch has the opportunity to purchase for $23,000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $5,600 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $12,000. Required Calculate the total relevant costs. Should Finch replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Total relevant costs Should Finch replace or continue the old truck? Keep Old Replace With New
- Zachary Freight Company owns a truck that cost $36,000. Currently, the truck's book value is $23,000, and its expected remaining useful life is four years. Zachary has the opportunity to purchase for $26,000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $6,600 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $17,000. Required Calculate the total relevant costs. Should Zachary replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Total relevant costs Should Zachary replace or continue the old truck? Keep Old Replace the old truck. Replace With NowRoadrunner Freight Company owns a truck that cost $42,000. Currently, the truck’s book value is $24,000, and its expected remaining useful life is four years. Roadrunner has the opportunity to purchase for $31,200 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $6,000 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $14,400.Calculate the total relevant costs. Should Roadrunner replace the old truck with the new fuel-efficientmodel, or should it continue to use the old truck until it wears out? Keep Old Replace with New Total Relevant CostRoadrunner Freight Company owns a truck that cost $42,000. Currently, the truck’s book value is $24,000, and its expected remaining useful life is four years. Roadrunner has the opportunity to purchase for $31,200 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $6,000 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $14,400.RequiredCalculate the total relevant costs. Should Roadrunner replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out?
- Blue Sky Catering is considering whether to retain or replace its aging delivery truck. The old truck originally cost $58,000 when it was purchased nine years ago. It has a book value of $7,000. According to the mechanic who serviced the truck during its last oil change, the old truck has 3 years of useful life left. Blue Sky Catering wants to purchase a brand-new truck. The new truck costs $62,000 and has a 10-year useful life, after which it will have no salvage value. The new truck is a little larger and would accommodate larger jobs, leading to an additional $10,000 per year in contribution margin. It would also have a refrigerated section that would reduce waste by $500 each year. As the truck will be new, repairs and maintenance costs will also decrease from $2,100 to $1,300 annually. The old truck can be sold for $8,000. Prepare a quantitative analysis to determine whether or not to purchase the new truck. Do not enter dollar signs or commas in the input boxes. Use the negative…On January 2, 2018, Quick Delivery Service purchased a truck at a cost of $95,000. Before placing the truck in service, Quick spent $2,200 painting it, $1,500 replacing tires, and $10,300 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 26,000 miles in each of the first four years and 19,750 miles in the fifth year-123,750 miles in total. In deciding which depreciation method to use, Carl Thomas, 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 1 Requirements - X Depreciation…Freebird Inc acquired a truck to transport its inventory from the port to its various stores. The truck cost $125,000; taxes and licensing fees were $12,000; a custom paint job to put the firm logo on cost $5,000. In the first week of use, an inexperienced driver shredded two of the truck's tires, necessitating replacement tires that cost $750. The truck is estimated to last 5 years or 200,000 miles. It has an expected salvage value of $10,000. In year 1, the truck is estimated to be driven 40,000 miles; in years 2 and 3 the truck's mileage is estimated to be 50,000 per year, and 30,000 per year for years 4 and 5. Required: Find the depreciation expense, A/D, and book value after two years, using 3 different methods: straight-line, units of production, double-declining balance.