Chapter 9 homework

On Jan 1, 20012, Jen & Berry’s Ice Cream Co. purchased a new fleet of delivery trucks for a total of $500,000.  The estimated life of the trucks is 8 years.  During those 8 years it is expected that the trucks can be driven a total of 800,000 miles.  The total estimated residual value is $100,000.

Compute the depreciation expense on the fleet of  trucks in 2012 and 2013 using the Straight Line and 200% Declining-Balance methods.  Also calculate the 2012 and 2013 depreciation using the Units of Output Method if the trucks are driven a total of  80,000 miles in 2012 and 120,000 miles in 2013.

Finally, indicate which depreciation method would give Jen & Berry’s the largest profits in 2012.

Answers:

Depreciation method giving Jen & Berry’s the largest profits in 2012:___________________

Briefly Explain Why:

IMPORTANT: Show All Calculations on next page in order to receive credit for your answers above!!

Calculations