Question

Linton Company purchased a delivery truck for $29,000 on January 1, 2017. The truck has an expected salvage value of $2,100, and is expected to be driven 106,000 miles over its estimated useful life of 10 years. Actual miles driven were 15,300 in 2017 and 13,400 in 2018. Correct answer. Your answer is correct. Calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.52.) Depreciation expense $Entry field with correct answer .25 per mile SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT Correct answer. Your answer is correct. 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 decimal places, e.g. 15%. Round final answers to 0 decimal places, e.g. 2,125.) Depreciation Expense 2017 2018 (1) Straight-line method $Entry field with correct answer 2690 $Entry field with correct answer 2690 (2) Units-of-activity method $Entry field with correct answer 3825 $Entry field with correct answer 3350 (3) Double-declining-balance method $Entry field with correct answer 5800 $Entry field with correct answer 4640 SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT Partially correct answer. Your answer is partially correct. Try again. Assume that Linton uses the straight-line method. Prepare the journal entry to record 2017 depreciation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 2,125.) Account Titles and Explanation Debit Credit Entry field with correct answer Depreciation Expense Entry field with correct answer 2690 Entry field with correct answer Entry field with incorrect answer now contains modified data Accumulated Depreciation-Equipment Entry field with correct answer Entry field with correct answer 2690 SHOW LIST OF ACCOUNTS LINK TO TEXT Partially correct answer. Your answer is partially correct. Try again. Assume that Linton uses the straight-line method. Show how the truck would be reported in the December 31, 2017, balance sheet. (Round answers to 0 decimal places, e.g. 2,125.) LINTON COMPANY Partial Balance Sheet Entry field with correct answer Entry field with incorrect answer now contains modified data $Entry field with incorrect answer now contains modified data 29000 Entry field with correct answer: Entry field with incorrect answer now contains modified data Accumulated Depreciation-Equipment Entry field with incorrect answer now contains modified data 2690 $Entry field with incorrect answer now contains modified data 26310

Answer 1

	Unit of activity method
	depreciation expense per mile under units-of-activity method	(cost of truck-depreciation)/total expected miles to be driven	(29000-2100)106000	0.2538
	annual depreciation in 2017	Actual miles driven*depreciation rate per mile	.2537*15300	3881.61
	annual depreciation in 2018	Actual miles driven*depreciation rate per mile	.2537*13400	3399.58
dec 31 2017	Depreciation expense	3881.61
	accumulated depreciation		3881.61
dec 31 2018	Depreciation expense	3399.58
	accumulated depreciation		3399.58
Depreciation expense using straight line method
	cost of truck		29000
	less scrap value		2100
	amount to be depreciated		26900
	life of truck		10
	straight line depreciation	26900/10	2690
	annual depreciation in 2017		2690
	annual depreciation in 2018		2690
dec 31 2017	Depreciation expense	2690
	accumulated depreciation		2690
dec 31 2018	Depreciation expense	2690
	accumulated depreciation		2690
Depreciation using double declining method of depreciation
	cost of truck		29000
	less scrap value		2100
	amount to be depreciated		26900
	straight line rate of depreciation	1/10	10%
	double declining rate	10*2	20%
Year	amount to be depreciated	rate of depreciation	annual depreciation	year end balance
2017	26900	20%	5380	21520
2018	21520	20%	4304	17216
dec 31 2017	Depreciation expense	5380
	accumulated depreciation		5380
dec 31 2018	Depreciation expense	4304
	accumulated depreciation		4304
Balance sheet -2017
Assets
Truck	29000
less accumulated depreciation-truck	2690
truck net off accumulated depreciation		26310