Question:

1.Hadicke company purchased a delivery truck for $44,000 on 1^st January, 2012. The truck was assigned an evaluated useful life of 100,000 miles and has a residual value of $8,000.The truck been driven 12,000 miles in 2012 and 24,000 miles in 2013. Compute depreciation expense using the units of activity method for the years 2012 and 2013.

2.Miley Enterprises sold equipment on 1^st January, 2013 for $12,000. The equipment had cost $38,000. The balance in Accumulated Depreciation at January 1 is 20,000. What entry would Miley make to record the sale of the equipment?

3.Conroy Company purchased a machine at cost of $75,000. The machine is expected to have a $5,000 salvage value at the end of its six-year useful life.

Instruction:

Evaluate annual depreciation for the first and second years using the

a. straight-line method

b. double-declining-balance method