Essay
On January 2, 2012, Brimm Corporation purchased a delivery truck for $20,000. The estimated useful life of the truck is 5 years, with an estimated salvage value of $4,000. The truck is expected to be driven 200,000 miles during the five year estimated useful life.
a) If Brimm uses double-declining balance depreciation, what is the amount of depreciation for 2013? What is the balance of the accumulated depreciation account at the end of 2013 after adjusting entries have been made?
b) Refer to part a. Assume Brimm used the double declining balance method for depreciation and sold the truck at the beginning of 2014 for $12,000. What is the amount of the gain or loss on the sale of the delivery van?
c) Assume that Brimm used units-of-production depreciation. The delivery van was driven 50,000 miles the first year and 40,000 miles the second year. What is the amount of depreciation expense for 2012 and for 2013? What is the balance of the accumulated depreciation account at the end of 2013 after adjusting entries have been made?
Correct Answer:
Verified
Correct Answer:
Verified
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