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Bigfoot Painting LLC bought a new RV for $320, 000 on June 1, Year 1 to use in normal operations.
The RV was estimated to have an 8 - year useful life or 250, 000 miles. The salvage value is expected
to be $40, 000 .
Determine the amount of depreciation expense for Years 1 - 3 using Straight - line, Units - of - Activity,
and Double - Declining Balance Methods.
Bigfoot Painting traded in the RV at the end of Year 3 . They received $95, 000 of trade allowance
towards the purchase of a new RV with a cost of $400, 000 . The rest of the purchase was made with
cash. Assume Bigfoot Painting has been using the Units - of - Activity method. Record the trade/swap
of RVs .
Miles Driven:
Year 1: 80, 000
Year 2: 40, 000
Year 3: 50, 000

Sagot :

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