Bing's Export Co.
Bing's Export Co.purchased a new delivery truck at the beginning of 2015.The truck has a cost of $37,000, an estimated life of 5 years, and an estimated residual value of $7,000.A full year's depreciation expense is to be recorded in 2015.The truck was driven 20,000 miles during 2015 and 24,000 miles during 2016.The number of expected miles over five years is 100,000.
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What is the amount by which double-declining-balance depreciation exceeds straight-line depreciation over the 5-year life of the truck?

Question

Quizplus · Accepted Answer

Both double-declining-balance and straight-line depreciation methods will result in the same total depreciation over the asset's life, which is the cost minus the residual value ($37,000 - $7,000 = $30,000). Therefore, the excess is $0.

Bing's Export Co. Bing's Export Co.purchased a New Delivery Truck at the Beginning