Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in Trucks is $385,500 and the balance in Accumulated Depreciation—Trucks is $115,400. Details of the subsidiary ledger are as follows: Truck No. Cost Estimated Residual Value Estimated Useful Life Accumulated Depreciation at Beginning of Year Miles Operated During Year 1 $78,500 $11,775 240,000 miles — 36,000 miles 2 114,500 13,740 320,000 $22,900 32,000 3 90,000 12,600 213,000 $72,000 21,300 4 102,500 12,300 370,000 $20,500 44,400 a. Determine for each truck the depreciation rate per mile and the amount to be credited to the accumulated depreciation section of each subsidiary account for the miles operated during the current year. Keep in mind that the depreciation taken cannot reduce the book value of the truck below its residual value. Round the rate per mile to two decimal places. Enter all values as positive amounts. Truck No. Rate per Mile (in cents) Miles Operated Credit to Accumulated Depreciation 1 $ 36,000 $ 2 $ 32,000 $ 3 $ 21,300 $ 4 $ 44,400 $ Total $ b. Journalize the entry to record depreciation for the year. Depreciation Expense-Trucks Accumulated Depreciation-Trucks

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter7: Fixed Assets, Natural Resources, And Intangible Assets

Section: Chapter Questions

Problem 7.3.2MBA

See similar textbooks

Related questions

Question

Depreciation by units-of-activity Method

Prior to adjustment at the end of the year, the balance in Trucks is $385,500 and the balance in Accumulated Depreciation—Trucks is $115,400. Details of the subsidiary ledger are as follows:

Truck No.	Cost	Estimated Residual Value	Estimated Useful Life	Accumulated Depreciation at Beginning of Year	Miles Operated During Year
1	$78,500		$11,775		240,000	miles	—	36,000	miles
2	114,500		13,740		320,000		$22,900	32,000
3	90,000		12,600		213,000		$72,000	21,300
4	102,500		12,300		370,000		$20,500	44,400

a. Determine for each truck the depreciation rate per mile and the amount to be credited to the accumulated depreciation section of each subsidiary account for the miles operated during the current year. Keep in mind that the depreciation taken cannot reduce the book value of the truck below its residual value.

Round the rate per mile to two decimal places. Enter all values as positive amounts.

Truck No.	Rate per Mile (in cents)	Miles Operated	Credit to Accumulated Depreciation
1	$		36,000	$
2	$		32,000	$
3	$		21,300	$
4	$		44,400	$
			Total	$

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

	Depreciation Expense-Trucks
	Accumulated Depreciation-Trucks

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.