Week 11 Accounting Workshop: One Van, Two Schedules, One Sale

Part 1 — The Big Picture

This week you learned that a long-lived asset's cost includes everything needed to get it ready for use, and that depreciation allocates that cost to the years that use the asset; it is not market value and not cash. In this workshop you work one small set of books end to end: the bicycle shop's delivery van. You build its cost, depreciate it by straight-line and by double-declining-balance for all five years and by units-of-production for Year 1, record the purchase, a year's depreciation, and the sale at the end of Year 3, check that every entry balances, read what the schedules show in one plain sentence, and then check a chatbot's version of the same work. This is the analyze-and-explain mode of the Accounting Workshop: the method comparison and its reading carry the weight, while the record-and-post work from Week 3 and the adjust-and-report work from Week 4 carry forward into the entries.

Time budget: Plan for about 90 minutes.

Part 2 — The Task

Guiding question: How do straight-line and double-declining-balance move the same $27,000 of the van's cost into different years, and what does the van's $12,500 sale show once its book value is known?

Workshop data: Dataset H, the bicycle shop's delivery van (illustrative)

Source: The running case: an illustrative, unnamed bicycle repair and sales shop, organized as a corporation by two founders, which buys a delivery van, depreciates it, and sells it at the end of Year 3; it describes no real business.

• Rows: one van followed over 5 years and one sale; the cost table has 1 row, the schedule table has 6 rows (5 year rows plus a totals row), and the entry table has 8 rows (2 for the purchase, 2 for the depreciation, and 4 for the sale)
• Price and costs to get it ready: price $28,000, freight $1,500, and setup $500
• Estimates: residual value $3,000; useful life 5 years or 90,000 miles
• Use in Year 1: 20,000 miles
• Sale: sold at the end of Year 3, under straight-line, for $12,500 in cash

Part 3 — Materials & Procedure

Tools and materials

• A free spreadsheet (Google Sheets, or any free spreadsheet) for journals, T-accounts, trial balances, schedules, and statements, with every total computed by formula; the SEC's free EDGAR search for public companies' annual reports; and one approved chatbot used as a sparring partner whose entries, totals, and claims about standards and tax rates the student checks by hand and against the pinned source before trusting them
• A free spreadsheet (Google Sheets, or any free spreadsheet)
• One approved chatbot

Ways of working

• record-and-post
• adjust-and-report
• analyze-and-explain

Procedure

1. Read Dataset H in Part 2 twice. Write one line in your own words for each of the price, the freight, and the setup, saying why it belongs in the van's cost. Check: Three short lines tying each payment to getting the van ready for use.
2. Open a new sheet and copy the cost table from Part 4. Enter the three payments and compute the cost with a SUM formula, then compute the depreciable cost as the cost minus the residual value. Tool: A free spreadsheet (Google Sheets, or any free spreadsheet). Check: A cost and a depreciable cost computed by formula from the three payments and the residual value.
3. On a second tab, copy the schedule table from Part 4. Fill the straight-line columns with a formula that divides the depreciable cost by the useful life, and the double-declining-balance columns with a formula that multiplies each year's starting book value by twice the straight-line rate, stopping the last year at the residual value. Total both depreciation columns with SUM formulas. Tool: A free spreadsheet (Google Sheets, or any free spreadsheet). Check: Two schedules whose depreciation columns have the same total and whose final book values both equal the residual value.
4. Beside the schedule, compute the units-of-production rate per mile and its Year 1 depreciation for the 20,000 miles driven. Tool: A free spreadsheet (Google Sheets, or any free spreadsheet). Check: A per-mile rate from the depreciable cost and a Year 1 figure from the miles driven.
5. Copy the entry table from Part 4 and write the purchase, the year-end straight-line depreciation, and the sale at the end of Year 3, each with the accounts debited first and the account credited below them. Tool: A free spreadsheet (Google Sheets, or any free spreadsheet). Check: Three entries, each with equal debits and credits, and Cash only in the purchase and the sale.
6. Answer the analysis questions in Part 5, including the plain sentence that says what the two schedules show. Check: Written answers to all five questions.
7. Paste your three tables and then the Part 6 prompt into one approved chatbot. Compare every entry, every total, and every claim about a rule or a rate with your own work and with Chapter 11, and write the critique report, or complete the equivalent route instead. Tool: One approved chatbot. Check: A three-to-five-sentence report that quotes at least two of the chatbot's slips and corrects each by hand, or the marked-up equivalent-route analysis.

Fallback route

When to use it: Use this route if you cannot open a spreadsheet or print the tables.

Copy the three tables by hand onto paper or into any text file, read Dataset H from this page, compute each cost, depreciation, book value, and sale figure by hand, add each depreciation column twice, and complete every analysis question and the critique step in the same order. Submit a photo or scan of the paper, or the text file, for equal credit.

This route earns the same credit as the primary route.

Part 4 — The Scaffold

Build the van's cost from every payment needed to get it ready for use, so the depreciation that follows starts from the right figure.

Student scaffold table 1

Price	Freight	Setup	Cost	Residual value	Depreciable cost
$28,000	$1,500	$500		$3,000

Run the two schedules side by side, so you can see each method move the same depreciable cost into different years.

Student scaffold table 2

Year	Straight-line depreciation	Straight-line book value	Double-declining-balance depreciation	Double-declining-balance book value
1
2
3
4
5
Total

Record each entry in the same order every time, accounts debited first and the account credited below, so you can check that the two sides are equal.

Student scaffold table 3

Entry	What happened	Account	Debit	Credit
1	Purchase of the van, paid in cash
1	Purchase of the van, paid in cash
2	Year-end straight-line depreciation
2	Year-end straight-line depreciation
3	Sale at the end of Year 3
3	Sale at the end of Year 3
3	Sale at the end of Year 3
3	Sale at the end of Year 3

Part 5 — Analysis Questions

1. Compute the van's cost, its depreciable cost, and its straight-line depreciation and book value for each of the 5 years, showing each addition, subtraction, and division.
2. Compute the double-declining-balance rate and each year's depreciation and book value, showing where the last year stops at the residual value, and compute the units-of-production rate and Year 1 depreciation.
3. Compute the van's book value at the end of Year 3 under straight-line and the gain or loss on the $12,500 sale, and explain why the cash received is not itself a gain.
4. Write one plain sentence saying what the two schedules show. Then say in words how choosing double-declining-balance instead of straight-line would change Year 1's net income, the book value after Year 3, and the gain or loss on the same sale, without calling either method better.
5. Choose one reflection: (a) which step did your first instinct get wrong, and what changed your mind? or (b) name one estimate in Dataset H that the shop cannot know for certain, and how a different estimate would change the schedule.

Part 6 — AI-Critique Moment

Choose one equal-credit critique route. Route A: ask an approved AI tool to critique your completed work, then check its response against your own evidence. Route B is the no-AI equivalent printed below.

Approved tools: Claude, Gemini, ChatGPT, Grok, Microsoft Copilot.

Prompt to paste:

I've pasted my completed cost table, depreciation schedules, and journal entries above. Here is an illustrative bicycle shop's delivery van: price $28,000, freight $1,500 to deliver it, and $500 to set it up for carrying bicycles. The shop expects a $3,000 residual value and a useful life of 5 years or 90,000 miles, and it drives the van 20,000 miles in Year 1. Please give the van's cost and the purchase entry, then build its straight-line and double-declining-balance schedules for all 5 years with the book value after each year, and give the units-of-production depreciation for Year 1. Write the year-end straight-line depreciation entry. At the end of Year 3, under straight-line, the shop sells the van for $12,500 in cash: give the book value, the gain or loss, and the sale entry. Then tell me how much cash the shop spends on depreciation each year, what the van is worth at the end of Year 1, where Accumulated Depreciation goes on the balance sheet, what rule says which depreciation method a van must use, what Social Security rate and wage base apply to the shop's mechanic in 2026, and whether the shop could use LIFO for its bicycles under IFRS.

Test the response for these likely failures:

• Chatbots sometimes record the $12,500 from selling the van as revenue earned when the cash arrives, as if the shop had made a sale to a customer.
• Chatbots sometimes write the year-end depreciation entry backwards, debiting Accumulated Depreciation and crediting Depreciation Expense.
• Chatbots often leave Accumulated Depreciation out of the sale entry, writing Cash 12,500 and a loss against Delivery Van 30,000.
• Chatbots sometimes book the $1,500 freight and the $500 setup as expenses of the month the van arrives.
• Chatbots often subtract the residual value before applying the 40 percent rate, or keep applying 40 percent in Year 5 and leave book value at $2,332.80.
• Chatbots sometimes invent a rule, such as GAAP requiring vehicles to be depreciated by one particular method or over a fixed number of years.
• Chatbots often quote an earlier year's Social Security wage base when asked about the mechanic's wages.
• Chatbots sometimes say a business reporting under IFRS may choose LIFO for its inventory.
• Chatbots sometimes say the shop spends $5,400 of cash on depreciation each year.
• Chatbots often say the van is worth $24,600 at the end of Year 1 because that is its book value.
• Chatbots sometimes list Accumulated Depreciation among the liabilities because it has a credit balance.

Write three to five sentences naming what the chatbot got right and at least two places where it slipped into one of the failures above, quoting its words and correcting each by hand against Dataset H, Chapter 11, and the pinned source.

Equivalent route (no AI required)

No AI account is required for this workshop. This route assesses the same objectives, Objective 7 (account for long-lived assets, including cost, depreciation by three methods, and disposal, and for current liabilities, including payroll) and Objective 3 (apply accrual accounting: recognize revenue and expenses in the right period, prepare adjusting entries for deferrals and accruals, and prepare an adjusted trial balance), takes comparable effort of about the same 90 minutes, uses the same rubric, and earns the same credit. Instead of the chatbot, critique this flawed analysis of Dataset H, printed here in full: "The van cost $28,000; the $1,500 freight and $500 setup are expenses of the month it arrived. Straight-line depreciation is 28,000 ÷ 5 = $5,600 a year, and each year the shop spends that much cash on the van. The year-end entry is debit Accumulated Depreciation 5,600 and credit Depreciation Expense 5,600, and Accumulated Depreciation is a liability. At the end of Year 1 the van is worth its book value. For double-declining-balance, take off the residual first: 27,000 × 0.40 = $10,800 in Year 1, and keep using 40 percent every year, even in Year 5. GAAP requires every delivery van to use double-declining-balance. When the shop sells the van for $12,500, it records $12,500 of revenue: debit Cash 12,500, debit Loss on Sale of Delivery Van 1,300, and credit Delivery Van 30,000. The mechanic's wages carry Social Security at 6.2 percent on wages up to a $168,600 wage base, and under IFRS the shop could choose LIFO for its bicycles." Mark every error you find, name the failure it shows, and correct it by hand against Dataset H, Chapter 11, and the pinned source; find at least two. The wage base in it is out of date on purpose and is itself one of the errors. Submit the marked-up analysis with your corrections in place of the chatbot report and share link.

Part 7 — What to Submit

• The completed cost table, schedule table, and entry table from Part 4
• Written answers to all five analysis questions
• The chatbot critique report with its share link, or the equivalent route's marked-up flawed analysis

Deliverable:

A short Accounting Workshop report on the bicycle shop's delivery van: three completed tables (the van's cost, the straight-line and double-declining-balance schedules, and the purchase, depreciation, and sale entries), written answers to five analysis questions, and a critique of a chatbot's version of the same work, or, on the equivalent route, a marked-up correction of the printed flawed analysis. Choose how you show it: a completed spreadsheet with written answers, a recorded explanation with a transcript, or hand-drawn tables with short notes; every form is graded by the same scoring criteria. Submit in any accessible file type or as a link; a recorded response may be submitted as audio or video with a transcript, or as text.

Rubric

The rubric below shows how each submitted part is evaluated; bands are full, partial, or none.

Workshop evaluation criteria

Criterion	Full	Partial	None
Balanced, correctly classified entries	All three entries have the right accounts and amounts, each balances with the debits listed first, the depreciation entry touches no Cash, and the sale entry removes both the van and its Accumulated Depreciation.	Two entries are right, or all three are present but one is reversed, unbalanced, or leaves Accumulated Depreciation out of the sale.	Fewer than two correct entries, or a depreciation entry that credits Cash.
Cost and depreciation schedules, computed and footed	The cost includes the freight and setup, both schedules are correct year by year with their totals equal to the depreciable cost, double-declining-balance stops at the residual value, and the units-of-production figure uses the depreciable cost.	The cost and one schedule are right but the other schedule has an error, such as a rate applied after subtracting the residual value or a last year below the residual value.	No schedule, or a cost that leaves out the freight and setup with no schedule built on it.
Plain-sentence reading and the effect of a different method	One plain sentence says what the two schedules show, and the answer says in words how double-declining-balance would lower Year 1 net income and the book value after Year 3 and turn the same sale into a gain, without ranking either method.	The plain sentence or the method effect is present, but not both, or one of them is vague.	Neither the plain sentence nor the method effect is present.
Caught-and-corrected AI slip, on either route	The chatbot critique report, or the equivalent route's marked-up flawed analysis, quotes at least two errors and corrects each by hand against Dataset H, Chapter 11, and the pinned source; either route earns this band equally.	One error is quoted and corrected on either route, or errors are named without a correction.	No critique on either route, or chatbot output is pasted without checking it.
Gain or loss, limits, and reflection	The answers compute the $13,800 book value and the $1,300 loss, explain why the cash received is not a gain, and answer the chosen reflection option with a specific step or estimate from Dataset H.	Either the gain-or-loss explanation or the reflection is present, but not both, or one is general.	Neither the gain-or-loss explanation nor the reflection is present.

Quality Gate

• Every journal entry lists the debits first and the credits second, and its debits equal its credits.
• The depreciation entry does not touch Cash, and the sale entry removes both the van and its Accumulated Depreciation.
• Every cost, depreciation amount, book value, and total is computed by formula or written as a sum, difference, product, or quotient, and both schedules end at the residual value.
• No standard, rule, rate, statistic, or quotation is invented anywhere in the submission.
• The plain-sentence reading names what the schedules show and ranks no depreciation method as better.
• The critique quotes the chatbot or the flawed analysis and corrects at least two errors by hand.