Carter bought a car for her company on July 1, 2002 (mid year) for $35,000. She had to pay $600 in sales taxes, $200 for delivery charges and since she owns a nanny service, had it painted with diapers which cost $1,000. The car has an estimated life of 5 years or 130,000 miles and is expected to be worth only $200 at the end of its life (probably because of the painting). In 2002 she drove it 19,000 miles, in 2003 she drove it 16,000 miles, in 2004 she drove it 22,000 miles, and in 2005 she drove it 18,000 miles.
Using the straight line depreciation method, what is the depreciation expense for 2002?
Using the straight line depreciation method, what is the depreciation expense for 2003?
Using the Units of Activity method, what is the depreciation expense for 2002?