Question

Speedy Delivery Company purchases a delivery van for $36,000. Speedy estimates that at the end of its four-year service life, the van will be worth $6,400. During the four-year period, the company expects to drive the van 148,000 miles. Actual miles driven each year were 40,000 miles in year 1 and 46,000 miles in year 2. Required: Calculate annual depreciation for the first two years of the van using each of the following methods. (Do not round your intermediate calculations.)

Answer 1

Year 1 = $8000

Year 2 = $9200

Step-by-step explanation:

($36000 - $6400) ÷ 148000 = $0.2 /miles

Year 1,

40000 × $0.2 = $8000

Year 2,

46000 × $0.2 = $9200

but I don't know these were pure logic, no formula whatsoever... feel free to delete them if its wrong..