Question 1 - Corales Company acquires a delivery truck at a cost of $38,000. The truck is expected to have a salvage value of $6,000 at the end of its 4-year useful life. Compute annual depreciation expense for the first and second years using the straight-line method. Compute depreciation and evaluate treatment.
Question 2 - Depreciation information for Corales Company is given in BE-4. Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balance method. Compute depreciation using the units-of-activity method.