Response to the following problem:
At the beginning of the year, JetQuick Airways purchased a used Boeing aircraft at a cost of $42,000,000. JetQuick expects the plane to remain useful for five years (6 million miles) and to have a residual value of $6,000,000. JetQuick expects the plane to be flown 750,000 miles the first year.
1. Compute JetQuick's first-year depreciation on the plane using the following methods:
a. Straight-line
b. Units-of-production
c. Double-declining-balance
2. Show the airplane's book value at the end of the first year under the straight-line method.