KK Company bought a delivery truck for $62,000 on January 1, 2009. They installed a rear hydraulic lift for $8,000 and paid sales tax of $3,000. In addition, KK paid $2,400 for a one-year insurance policy and $500 for registration fees. They estimate the useful life of the truck to be 10 years and its residual value to be $8,000.
a) If KK uses the straight-line method of depreciation, what isthe depreciation expense and book value at the end of2010?
b) If KK uses the double declining-balance method, how much is depreciation expense in 2010?
c) If KK uses the units-of-production method when they have estimated the truck will be driven 500,000 miles over itslife, what is depreciation expense in 2010 when the truck is driven 60,000 miles?
d) What amount would be capitalized as the acquisition cost of the truck on KK's books?
e) What amounts connected to the truck's acquisition should be expensed during 2009 other than depreciation for the year?