on january 1, 2025, foley airline purchased a used airplane for $78,000,000. foley airline expects the plane…

on january 1, 2025, foley airline purchased a used airplane for $78,000,000. foley airline expects the plane to remain useful for four years (5,000,000 miles) and to have a residual value of $8,000,000. the company expects the plane to be flown 1,600,000 miles during the first year.\nread the requirements.\nrequirement 1a. compute foley airlines first - year depreciation expense on the plane using the straight - line method.\nbegin by selecting the formula to calculate the companys first - year depreciation expense on the plane using the straight - line method. then enter the amounts and calculate the depreciation for the first year.\n( cost - residual value ) / useful life = straight - line depreciation\n( $ 78,000,000 - $ 8,000,000 ) / 4 = $ 17,500,000\nrequirement 1b. compute foley airlines first - year depreciation expense on the plane using the units - of - production method.\nbefore calculating the first - year depreciation expense on the plane using the units - of - production method, calculate the depreciation expense per unit. select the formula, then enter the amounts and calculate the depreciation per unit.\n( cost - residual value ) / useful life in units = depreciation per unit\n( - ) / =

on january 1, 2025, foley airline purchased a used airplane for $78,000,000. foley airline expects the plane to remain useful for four years (5,000,000 miles) and to have a residual value of $8,000,000. the company expects the plane to be flown 1,600,000 miles during the first year.\nread the requirements.\nrequirement 1a. compute foley airlines first - year depreciation expense on the plane using the straight - line method.\nbegin by selecting the formula to calculate the companys first - year depreciation expense on the plane using the straight - line method. then enter the amounts and calculate the depreciation for the first year.\n( cost - residual value ) / useful life = straight - line depreciation\n( $ 78,000,000 - $ 8,000,000 ) / 4 = $ 17,500,000\nrequirement 1b. compute foley airlines first - year depreciation expense on the plane using the units - of - production method.\nbefore calculating the first - year depreciation expense on the plane using the units - of - production method, calculate the depreciation expense per unit. select the formula, then enter the amounts and calculate the depreciation per unit.\n( cost - residual value ) / useful life in units = depreciation per unit\n( - ) / =

Answer

Explanation:

Step1: Calculate depreciation per unit

The formula for depreciation per unit in the units - of - production method is ((Cost - Residual\ value)\div Useful\ life\ in\ units). Here, (Cost=$78,000,000), (Residual\ value = $8,000,000), and (Useful\ life\ in\ units=5,000,000) miles. [ \begin{align*} Depreciation\ per\ unit&=(78000000 - 8000000)\div5000000\ &=70000000\div5000000\ &=$14\ per\ mile \end{align*} ]

Step2: Calculate first - year depreciation expense

The plane is flown (1,600,000) miles in the first year. The first - year depreciation expense using the units - of - production method is (Depreciation\ per\ unit\times Number\ of\ units\ produced\ in\ the\ first\ year) [ \begin{align*} Depreciation\ expense&=14\times1600000\ &=$22,400,000 \end{align*} ]

Answer:

The depreciation per unit is ($14) per mile and the first - year depreciation expense using the units - of - production method is ($22,400,000)