Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in...

Depreciation by units-of-activity Method

Prior to adjustment at the end of the year, the balance in Trucks is $419,400 and the balance in Accumulated Depreciation—Trucks is $124,880. 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	$83,000	$12,450	220,000	miles	—	33,000	miles
2	115,400	13,848	280,000		$23,080	28,000
3	96,000	13,440	200,000		$76,800	20,000
4	125,000	15,000	420,000		$25,000	50,400

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	$	33,000	$
2	$	28,000	$
3	$	20,000	$
4	$	50,400	$
		Total	$

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

Expert Solution

ekkarill92 answered 2 years ago

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