On January 1,2016,Phoenix Corporation purchased a delivery truck for $45,000.The estimated useful life of the truck is 5 years,with an estimated salvage value of $9,000.The truck is expected to be driven 200,000 miles during its useful life.
a)If Phoenix uses double-declining balance depreciation,what is the amount of depreciation for 2017? What is the balance of the accumulated depreciation account at the end of 2017?
b)Refer to part a.Assume Phoenix used double-declining balance depreciation and sold the truck at the beginning of 2018 for $18,000.What is the amount of the gain or loss on the sale of the delivery van?
c)Prepare the journal entry to record the sale in part (b).
d)Assume that Phoenix used units-of-production depreciation instead.The delivery van was driven 50,000 miles the first year and 40,000 miles the second year.What is the amount of depreciation expense for 2016 and for 2017? What is the book value of the van at the end of 2017?
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