Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban. The cost of the Suburban is $11,200. The vehicle is purchased in late June and will be put into use on July 1, 2019. Annual insurance from GEICO runs $1,700 per year. The paint is starting to fade, so they spend an extra $2,800 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides. An additional $1,800 is spent on a deluxe roof rack and a trailer hitch. The painting, roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. They expect to use the Suburban for five years and then sell the vehicle for $4,300.
Required:
1. Determine the amount that should be recorded for the new vehicle.2. Prepare a depreciation schedule using the straight-line method.

Explanation:

Expenses can be capitalized if it improves the condition of an asset at acquisition and will increase the future benefits of the acquired asset.

The painting and the the cost of fixing the roof rack and the hitch are capitalized while the insurance cost is expended as administrative fee.

Cost

Cost of Vehicle - 11200

Painting - 2800

Fixing of roof and hitch - 1800

New vehicle cost - $15800

Useful life = 5 years

Depreciation rate = 1/5*100=20%

Scrap value - $4300

Depreciated value = $11500

Assuming a December 31 year end

                                  Depreciation         Accumulated depreciation

2019 1/2 year     11500*20%*1/2 =1150                1150

2020                      11500*20% = 2300               3450

2021                        11500*20% =2300                5750

2022                       11500*20% =2300                8050

2023                       11500*20% = 2300               10350

2024 1/2 year       11500*20%*1/2=1150               11500                        

you can put this in your 11 sentence summary

" most of the money would be invested in innovation, economic convergence."

answer/// equals both average variable cost and average total cost at their respective minimums;