Linton Company purchased a delivery truck for $35,000 on January 1, 2017. The tr

Question

Linton Company purchased a delivery truck for $35,000 on January 1, 2017. The truck has an expected salvage value of $1,800, and is expected to be driven 106,000 miles over its estimated useful life of 8 years. Actual miles driven were 12,400 in 2017 and 14,900 in 2018.

Exercise 10-7 Linton Company purchased ? delivery truck or $35,000 on January 1 2017. The truck has an expected salvage value of $1,800 and is expected to be driven 106,000 miles over its estimated useful lite o 8 years Actual miles driven were 12,400 in 2017 and 14,900 in 2018. Calculate depreciation expense per mile under units of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciation expense per mile OF ACCOUNTS L?NK 10 IKI Compute depreciation expense for 2017 and 2018 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining-balance method. (Round depreciation cost per unit to 2 decimal places, e g 0.50 and depreciation rate to 0 decinal places, e-0.15%. Round firal answers to O deci al places, e.g. 125 Depreciation Expense 2018 2017 (1) Straight-line method (2) Units-of-activity method (3) Declining-balance method

Explanation / Answer

Depreciation expense per mile = (35000-1800)/106000 = 0.31 per mile

Calculate depreciation :

Journal entry :

Balance sheet presentation :

2017 2018 Straight line (35000-1800/8) = 4150 4150 Unit of activity 12400*0.31 = 3844 14900*0.31 = 4619 Double decline balance method 35000*25% = 8750 35000*75%*25% = 6563

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