Reference no: EM132490511

Three different companies each purchased trucks on January 1, 2018, for $62,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $2,000. All three trucks were driven 80,000 miles in 2018, 55,000 miles in 2019, 51,000 miles in 2020, and 70,000 miles in 2021. Each of the three companies earned $53,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation.

Answer each of the following questions. Ignore the effects of income taxes.

Question 1: Which company will report the lowest amount of cash flow from operating activities on the 2020 statement of cash flows?

Question 2: What is the cash flow from operating activities? if income tax is not considered?

Question 3: Depreciation expenses? Cash flow items?