Question - Speedy Delivery Company purchases a delivery van for $43,200. Speedy estimates that at the end of its four-year service life, the van will be worth $6,800. During the four-year period, the company expects to drive the van 227,500 miles.
Actual miles driven each year were 58,000 miles in year 1 and 62,000 miles in year 2.
Required: Calculate annual depreciation for the first two years of the van using each of the following methods.
1. Straight-line.
2. Double-declining-balance.
3. Activity-based.