ACCOUNTING-Depreciation methods. Mike Davis Enterprises purchased a delivery van

QUESTION

5. Depreciation methods. Mike Davis Enterprises purchased a delivery van for $40,000 in January 20X7. The van was estimated to have a service life of 5 years and a resid­ual value of $6,000. The company is planning to drive the van 20,000 miles annually. Compute depreciation expense for 20X8 by using each of the following methods:a. Units-of-output, assuming 17,000 miles were driven during 20X8b. Straight-linec. Double-declining-balance

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