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    Depreciation calculation methods (Kleener Co.)

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    Kleener Co. acquired a new delivery truck at the beginning of its current fiscal year. The truck cost $26,000 and has an estimated useful life of four years and an estimated salvage value of $4,000.

    A) Calculate depreciation expense for each year of the truck's life using
    1. Straight-line depreciation.

    2. Double declining balance depreciation.

    B) Calculate the truck's net book value at the end of its third year of use under each depreciation method.

    C) Assume that Kleener Co. had no more use for the truck after the end of the third year and that at the beginning of the fourth year it had an offer from a buyer, who was willing to pay $6200.00 for the truck. Should the depreciation method used by Kleener Co. affect the decision to sell the truck?

    Show your work using excel. Thank you for getting me started here!!

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    Solution Summary

    Your solution is an Excel file **(attached)** and includes straight line and DDB methods, book value computations and an analysis of how the gain or loss on sale is impacted by method.