Linton Company purchased a delivery truck for $34,000 on January 1, 2020. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2020 and 12,000 in 2021. Instructions (a) Compute depreciation expense for 2020 and 2021 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining-balance method. (b) Assume that Linton uses the straight-line method. (1) Prepare the journal entry to record 2020 depreciation. (2) Show how the truck would be reported in the December 31, 2020, balance sheet

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Linton Company purchased a delivery truck for $34,000 on January 1, 2020. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2020 and 12,000 in 2021.
Instructions
(a) Compute depreciation expense for 2020 and 2021 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining-balance method.
(b) Assume that Linton uses the straight-line method.
(1) Prepare the journal entry to record 2020 depreciation.
(2) Show how the truck would be reported in the December 31, 2020, balance sheet.

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