Straight-Line Method: 1. Corales Company acquires a delivery truck at a cost of $38,000. The truck is expected to have a salvage value of $6,000 at the end of its 4-year useful life.
Compute annual depreciation expense for the first and second year using straight line method.
Double Declining Method:
2. Depreciation information for Corales Company is given above. Assuming the declining-balance depreciation rate is double the straight-line rate.
Compute annual depreciation for the first and second years under the double declining method.
Units of Activity Method:
3. Rosco Taxi Service uses the units of activity method in computing depreciation on its taxicabs. Each cab is expected to be driven 150,000 miles. Taxi no. 1o cost $39,500 and is expected to have a salvage value of $500. Taxi no. 10 is driven 30,000 miles in year 1 and 20,000 miles in year 2.
Compute the depreciation for each year.

1. depreciation expense for the first and second year is $8000

2. Depreciation expense in the first year =$19,000

Depreciation expense in the second year = $9500

3. Depreciation expense in year 1 = $7800

Depreciation expense in year 2 = $5200

Explanation:

Straight line depreciation expense = (Cost of asset - Salvage value) / useful life

( $38,000 -  $6,000) / 4 = $8000 = $8000

depreciation expense for the first and second year is $8000

2. Depreciation expense using the double declining method = Depreciation factor x cost of the asset

Depreciation factor = 2 x (1/useful life)  = 2/4 = 0.5

Depreciation expense in the first year = 0.5 x $38,000 = $19,000

Book value at the beginning of year 2 = $38,000 - $19,000 = $19,000

Depreciation expense in the second year = 0.5 x $19,000 = $9500

3. (miles driven in a year / expected miles to be driven) x ( cost of asset - salvage value)

Depreciation expense in year 1 = (30,000 / 150,000) x ($39,500 - $500) = $7800

Depreciation expense in year 2 = (20,000 / 150,000) x ($39,500 - $500) = $5200

an online clothing brand

explanation:

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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