Prior to adjustment at the end of the year, the balance in Trucks is $298,000 an

Question

Prior to adjustment at the end of the year, the balance in Trucks is $298,000 and the balance in Accumulated Depreciation—Trucks is $35,478. Details of the subsidiary ledger are as follows:

a. Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year. Round the rate per mile to two decimal places and credit to accumulated depreciation to the nearest dollar.

b. Journalize the entry to record depreciation for the year.

Truck
No. Cost Estimated
Residual
Value Estimated
Useful
Life
(in miles) Accumulated
Depreciation
at Beginning
of Year Miles
Operated
During
Year 1 $56,700 7,400 170,000 - 26,000 2 82,100 10,700 340,000 $678 27,000 3 45,100 3,700 230,000 9,500 41,000 4 114,100 16,600 250,000 25,300 50,000

Explanation / Answer

TOTAL   40090

b. Journal Dr. Cr.

Depreciation Expense-Trucks Dr. $40090

To Accumulated Depreciation-Trucks $40090

(Depreciaton expenses on the trucks being provided for the year)

Answer to a. (1)Truck No. (2)Cost($) (3)Estimated
Residual
Value($) (4)Estimated
Useful
Life
(in miles) (5)Rate($) per Mile={(2)-(3)}/(4) (6)Miles Operated (7)Credit to Accumulated Depreciation($)=(5)*(6) 1 56700 7400 170000 .29 26000 7540 2 82100 10700 340000 .21 27000 5670 3 45100 3700 230000 .18 41000 7380 4 114100 16600 250000 .39 50000 19500

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