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 ife, Souther 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 Total

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 ife, Souther 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 Total

Name: Southern Pizza bought a used Ford delivery van on January 2, 2021, fo
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Description: 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, Southernmanagement estimated that the van's residual value would

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Tasty Tongue Pizza bought a used Nissan delivery van on January 2, 20X6, for $19,000. The van was expected to remain in service for four years (36,000 miles). At the end of its useful life, Tasty Tongue's officials estimated that the van's residual value would be $2,800. The van traveled 11,000 miles the first year, 13,000 miles the second year, 5,000 miles the third year, and 7,000 miles in the fourth year. 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. Requirement 1. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods. (For units-of-production and double-declining-balance, round to the nearest two decimals after each step of the calculation. For years with $0 depreciation, make…
On January 3, 2018, Rapid Delivery Service purchased a truck at a cost of $100,000. Before placing the truck in service, Rapid spent $3,000 painting it, $600 replacing tires, and $10,400 overhauling the engine. The truck should remain in service for five years and have a residual value of $12,000. The truck’s annual mileage is expeZcted to be 32,000 miles in each of the first four years and 8,000 miles in the fifth year—136,000 journal entry to 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). Requirements Prepare a depreciation schedule for each depreciation method, showingdepreciation expense, accumulated depreciation, and asset book value. Rapid prepares financial statements using the depreciation method that reports the highest net income in the early years of asset use. Consider the first two…
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Speed, Inc., is a shipping company. On 1/1/20, the company purchases a new commercial sleeper truck for $790,000 cash. The expected residual value of the truck is $60,000 and the expected useful life is 10 years. The company estimates that the truck will be used to drive 1,000,000 miles over its useful life (120,000 miles in 2020; 90,000 miles in 2021 & all subsquent years). For the units-of-activity method, round the depreciaiton-per-unit to two decimal places before using it. You PART A - STRAIGHT LINE DEPRECIATION Income StatementDepreciation Expense Year Ended 12/31/2020fill in the blank 1 Year Ended 12/31/2021 fill in the blank 2 Balance SheetAccumulated Depreciation As of 12/31/2020fill in the blank 3 As of 12/31/2021fill in the blank 4 PART B - UNITS-OF-ACTIVITY DEPRECIATION Income StatementDepreciation Expense Year Ended 12/31/2020fill in the blank 5 Year Ended 12/31/2021 fill in the blank 6 Balance SheetAccumulated Depreciation As of 12/31/2020fill in the…
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