Questions -
Q1. The Cagney Corporation uses double-declining depreciation (DDB) to depreciate its construction vehicles. Recently, the company bought a dump truck worth $180,000, with an estimated salvage (residual) value of $20,000. The truck is expected to last for 8 years. What is the amount of depreciation that will be recorded in the first year for this dump truck?
Q2. We Deliver! Is a local delivery company. It uses the units of production method to depreciate its delivery trucks. The company bought a truck for $56,000. It is estimated that the truck will be sold after 5 years for $5,000, and will have 300,000 miles at the end of its useful life. In the first year, the truck was driven 62,000 miles and in the second year it was driven another 78,000 miles. What is the Net Book Value of the truck at the end of year 2? Show your calculations.