Wexford Co.

Wexford Co. purchased a new delivery truck at the beginning of 2017. The truck has a cost of $37,000, an estimated life of five years, and an estimated residual value of $7,000. A full year's depreciation expense is to be recorded in 2017. The truck was driven 20,000 miles during 2017 and 24,000 miles during 2018. The number of expected miles over five years is 100,000.

-Refer to the information about Wexford Co.
Wexford Co.wants to use the depreciation method that will result in the highest depreciation expense for 2017.Which method should be used?

Question

Wexford Co.

Wexford Co. purchased a new delivery truck at the beginning of 2017. The truck has a cost of $37,000, an estimated life of five years, and an estimated residual value of $7,000. A full year's depreciation expense is to be recorded in 2017. The truck was driven 20,000 miles during 2017 and 24,000 miles during 2018. The number of expected miles over five years is 100,000.

-Refer to the information about Wexford Co.  
Wexford Co.wants to use the depreciation method that will result in the highest depreciation expense for 2017.Which method should be used?

Quizplus · Accepted Answer

The double-declining-balance method results in the highest depreciation expense in the earlier years of an asset's life, making it the best choice for Wexford Co. if their goal is to have the highest depreciation expense for 2017.

Wexford Co. Wexford Co. Purchased a New Delivery Truck at the Beginning