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Depreciation Calculation

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The following information is available for Queen Company, which has an accounting year end on December 31, 2003.

1. A delivery truck was purchased on June 1, 2001, for $50,000. It was estimated to have a $5,000 salvage value after being driven 120,000 miles. During 2003, the truck was driven 20,000 miles. The units-of-activity method of depreciation is used.

2. A building was purchased on January 1, 1976, for $2,000,000. It is estimated to have a $20,000 salvage value at the end of its 40-year useful life. The straight-line method of depreciation is being used.

3. Store equipment was purchased on January 1, 2002, for $180,000. It was estimated that the store equipment would have an $18,000 salvage value at the end of its 5-year useful life. The double-declining-balance method of depreciation is being used.

Instructions
Complete the table shown below by filling in the appropriate amounts.

-------------------------------------------
Accumulated Depreciation
Depreciation Expense for Book Value at
Assets 1/1/03 2003 12/31/03
-------------------------------------------
Delivery truck $ 19,500 $ $
-------------------------------------------
Building $1,336,500 $ $
-------------------------------------------
Store equipment $ 72,000 $ $
-------------------------------------------

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Solution Summary

The solution explains how to calculate the depreciation on various assets using the different depreciation methods

Solution Preview

The calculations are in the attached file

Truck - we find the depreciation per mile. This is (Purchase price-salvage value)/miles to be used. This comes to 0.375. For 2003, for ...

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