I need some help with this question… It is confusing me… I have parts of it done but would like someone to help explain it to me.
A truck was purchased on January 2 at a cost of $60,000. It’s expected to be used for five years and to have a residual value of $5,000 after 120,000 miles of service. The truck was driven for 23,000 miles the first year and 25,000 miles the second year. Calculate the depreciation expenses to the nearest dollar for the first and second years….
I have calculated the Straight-Line year one is 11,808 and year 2 is 11,792 I am having problems calculating the Units of Production because I know the equation is cost-residual value over estimated useful life in units… I just don’t understand what I put where.
Also I have to calculate the Double-Declining Balance I know the equation is 1 over the estimated useful life in years multiplied by 2 multiplied by the book value… what is the book value?
Please help!
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