Fidelity Industries purchased a new truck for $128,000. The company expected the truck to last 5 years or 50,000 miles, with an estimated salvage value of $16,000 at the end of that time. In the first year, the truck was driven 17,600 miles. As the
accountant for Fidelity, you can depreciate this truck using the double-declining-balance method or the units of production method. a. Which method of depreciation will allow the largest write-off in the first year? b. How much greater would the depreciation expense be using your answer to (a) above?
a. Double-declining-balance Method
b. $11,776
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What will be an ideal response?
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