Norika Company purchased a truck for 38000 The company expec

Norika Company purchased a truck for $38,000. The company expected the truck to have a useful life of four years or 85,000 kilometres, with an estimated residual value of $4,000 at the end of that time. During the first and second years, the truck was driven 24,000 and 30,500 kilometres, respectively.

Calculate the depreciation expense for the second year under the straight-line, units-of-production, and double-diminishing-balance methods. (Round answers to the nearest whole dollar, e.g. 5,275.)

		Year 2 Depreciation Expense
Straight-line method		$
Units-of-production method		$
Double-diminishing-balance method		$

Solution

Year 2 Depreciation Expense: Straight-line method 8500 =(38000-4000)/4 Units-of-production method 12200 =(38000-4000)/85000*30500 Double-diminishing-balance method 9500 =38000*50%*50%