Linton Company purchased a delivery truck for $32,000 on January 1, 2015. The tr

Question

Linton Company purchased a delivery truck for $32,000 on January 1, 2015. The truck has an expected salvage value of $2,000, and is expected to be driven 93,750 miles over its estimated useful life of 8 years. Actual miles driven were 16,200 in 2015and 12,800 in 2016. Calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciation expense per mile Compute depreciation expense for 2015 and 2016 using the straight-line method, the units-of-activity method, and the double-declining-balance method. (Round answers to 0 decimal places, e.g. 5,275.) Assume that Linton uses the straight-line method. Prepare the journal entry to record 2015 depreciation. (If no entry is required, select No entry for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Pound answers to O decimal places, e.g. 5,275.) Assume that Linton uses the straight-line method. Show how the truck would be reported in the December 31, 2015, balance sheet. (Round answers to 0 decimal places, e.g. 5,275.)

Explanation / Answer

Truck 32000

Less: Dep 3750

Truck 28250

2 Straight Line Method Cost- Salvage/ Life 32000-2000/8 $ 3750 per year 2015 3750 2016 3750 Units of activity 32000-2000/93750 .32 per mile 2015 16200*.32 5184 2016 12800*.32 4096 Journal Entries Depreciation A/c   Dr 3750           To Truck 3750

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