At the beginning of 2019, Propeller Air Service purchased a used airplane at a cost of $40,450,000.

Propeller Air Service expects the plane to remain useful for 8 years, or 10,330,000 miles and to have a residual value of $5,050,000.

The company expects the plane to be flown 1,180,000 miles during the first year and 1,300,000 miles the second year.

Note: When inputting a percentage value, do not include the % symbol, and round your answer to two decimal places (e.g., 50.35).

1. Compute second-year (2020) depreciation expense on the plane using the following methods:

a. Straight-line

Cost `-` Residual Value `/` Time = Depreciation Per year

`-` `/` =


b. Units of Production

Cost `-` Residual Value `/` Usage = Depreciation Per unit

`-` `/` =


Year 1 Depreciation per Unit X Miles = Depreciation

Year 1 X =

Year 2 Depreciation per Unit X Miles = Depreciation

Year 2 X =


c. Double-decling balance

1`/`(# of years) = Percent of Straight Line Depreciation

2 X Percent of Straight Line Depreciation = Percent of Double Declining Depreciation


1`/` = %

2 X = %


Year 1 Percent of Double Declining Depreciation `*` Cost = Depreciation

Year 1 % X =

Year 2 Cost - Depreciation * Percent of Double Declining Depreciation = Depreciation

Year 2 `-` X =


2. Calculate the balance in Accumulated Depreciation at the end of the second year for all three methods.

	Straight-line	Units-of production	Double-declining-balance
Depreciation Expense - Year 1
Depreciation Expense - Year 2
Total Accumulated Depreciation