Question

equired information [The following information applies to the questions displayed below.] Three different companies each purchased trucks on January 1, 2018, for $50,000. Each truck was expected to last four years or 200,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 66,000 miles in 2018, 42,000 miles in 2019, 40,000 miles in 2020, and 60,000 miles in 2021. Each of the three companies earned $40,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. Required Required a-1. Calculate the net income for 2018?

Answer 1

Check the explanation

Step-by-step explanation:

the 2018 net income for company A, B and C

Company A:

Depreciation expense 11250 = (50000-5000)/4

Net income 28750 = 40000-11250

Company B:

Depreciation expense 25000 = 50000*50%i.e 0.5

Net income 15000 = 40000-25000

Company C:

Depreciation expense 14850 =(50000-5000)/200000*66000

Net income 25150 =40000-14850