03 Prior to adjustment at the end of the year, the balance in Trucks is $304,620
ID: 2404579 • Letter: 0
Question
03 Prior to adjustment at the end of the year, the balance in Trucks is $304,620 and the balance in Accumulated Depreciation-Trucks is $101,500. Details of the subsidiary ledger are as ollows Estimated Accumulated Depreciation at Beginning of Year Miles Operated During Year 20.900 33,700 8,100 22.500 Truck No. Cost Residual Value Useful Life $76,700 59,900 77,320 90,700 15,500 5,900 3,000 23,500 255,000 miles 300,000 mile 201,000 miles 240,000 mles $13,790 62.290 25 420 Required: A Determine the depreciation rates per mie and tne amount rates per mie and he amoun no be credited to the accumulated depreciaton section of each of the subsidary accounts for the miles operated during the current year e Journalize the entry to record depreciation for the year Refer to te Chat of Accounts for exact wordng of accountExplanation / Answer
Answers
Working #1: Calculation of Rates per mile
Truck no.
Cost
Residual Value
Depreciable base
Useful life (in miles)
Rate per mile
[A]
[B]
[C = A – B]
[D]
[E = C / D]
1
$ 76,700.00
$ 15,500.00
$ 61,200.00
255,000
$ 0.24
2
$ 59,900.00
$ 5,900.00
$ 54,000.00
300,000
$ 0.18
3
$ 77,320.00
$ 13,000.00
$ 64,320.00
201,000
$ 0.32
4
$ 90,700.00
$ 23,500.00
$ 67,200.00
240,000
$ 0.28
Truck no.
Rate per mile
Miles operated
Credit to Accumulated Depreciation
[A = calculated above in Working #1]
[B]
[C = A x B]
1
$ 0.24
20,900
$ 5,016.00
2
$ 0.18
33,700
$ 6,066.00
3
$ 0.32
8,100
$ 2,592.00
4
$ 0.28
22,500
$ 6,300.00
TOTAL
$ 19,974.00
Date
Description
Debit
Credit
31-Dec
Depreciation Expense - Truck
$ 19,974.00
Accumulated Depreciation - Truck
$ 19,974.00
(depreciation expense adjustment entry)
Working #1: Calculation of Rates per mile
Truck no.
Cost
Residual Value
Depreciable base
Useful life (in miles)
Rate per mile
[A]
[B]
[C = A – B]
[D]
[E = C / D]
1
$ 76,700.00
$ 15,500.00
$ 61,200.00
255,000
$ 0.24
2
$ 59,900.00
$ 5,900.00
$ 54,000.00
300,000
$ 0.18
3
$ 77,320.00
$ 13,000.00
$ 64,320.00
201,000
$ 0.32
4
$ 90,700.00
$ 23,500.00
$ 67,200.00
240,000
$ 0.28
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