I am trying to figure out if I am doing this accounting problem correctly? Old van was purchased 5 1 answer below »

I am trying to figure out if I am doing this accounting problem correctly? Old van was purchased 5 years ago at 20,000. estimated life was 5years with salvage value of 5,000. van has to have repairs enging and tranny for 4000 and will extend life of van by 5years. new tires and other repairs estimated at 1200. a new van with trade-in value 6,000 on old van with purchase of new van costing 30,000. if new van is purchased and plan to depreciate it using units of production method. this units would be based on number of miles driven. the new van salvage value is 10,000 after its useful life of 100,000. 1. Depreciation expense for existing ban. cost of van 20,000 less: salvage 5,000 Depreciatable cost: 15000 2. the repaired van (the deprication of existing van). original cost 20,000 accumalated deprication (20,000-5,000)/5= 3000 time 5 years = 15000 new risual value= 20,000-15,000=5,000 cost of repairs 5200 with 5 year life. this is as far as i have gotten I don’t know what else to do? Or if this is even right. Please help me…

 

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