Kleener co acquired a new delivery truck at the beginning, Ask an Expert

Accounting

Kleener Co acquired a new delivery truck at the beginning ofits current fiscal year. The truck cost 26,000 and has an estimateduseful life of four years, and an estimated salvage value of4000.

Required:

A. Calculate depreciation expense for each year of the truck'slife using

1. Straight line depreciation

2. Double-declining balance method

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

C. Assume that Kleener Co. had no more use for the truck afterthe end of the third year and that at the beginning of the fourthyear it had an offer from a buyer who was willing to pay 6200 forthe truck. Should the depreciation method used by Kleener Co.affect the decision to sell the truck?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9991616

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