. 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 fill in the blank 1 of 9$ 31,500 fill in the blank 2 of 9$ 2 fill in the blank 3 of 9 33,000 fill in the blank 4 of 9 3 fill in the blank 5 of 9 21,900 fill in the blank 6 of 9 4 fill in the blank 7 of 9 42,000 fill in the blank 8 of 9 Total fill in the blank 9 of 9$ Feedback Area Feedback Asset minus residual value equals depreciable cost. Units-of-production allocates the cost of the asset equally over the units produced. The depreciation rate stays constant, no matter how many miles are driven each period. Keep in mind that the depreciation taken cannot reduce the book value of the truck below its residual value. Question Content Area b. Journalize the entry to record depreciation for the year. If an amount box does not require an entry, leave it blank.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Prior to adjustment at the end of the year, the balance in Trucks is $437,500 and the balance in
| Truck No. |
Cost | Estimated Residual Value |
Estimated Useful Life |
Accumulated Depreciation at Beginning of Year |
Miles Operated During Year |
|---|---|---|---|---|---|
| 1 | $84,500 | $12,675 | 210,000 miles | — | 31,500 miles |
| 2 | 119,000 | 14,280 | 330,000 miles | $23,800 | 33,000 miles |
| 3 | 104,000 | 14,560 | 219,000 miles | 83,200 | 21,900 miles |
| 4 | 130,000 | 15,600 | 350,000 miles | 26,000 | 42,000 miles |
Question Content Area
a. Determine for each truck the depreciation rate per mile and the amount to be credited to the accumulated depreciation section of each subsidiary account for the miles operated during the current year. Keep in mind that the depreciation taken cannot reduce the book value of the truck below its residual value. Round the rate per mile to two decimal places. Enter all values as positive amounts.
| Truck No. | Rate per Mile (in cents) |
Miles Operated | Credit to Accumulated Depreciation |
|---|---|---|---|
| 1 | fill in the blank 1 of 9$ | 31,500 | fill in the blank 2 of 9$ |
| 2 | fill in the blank 3 of 9 | 33,000 | fill in the blank 4 of 9 |
| 3 | fill in the blank 5 of 9 | 21,900 | fill in the blank 6 of 9 |
| 4 | fill in the blank 7 of 9 | 42,000 | fill in the blank 8 of 9 |
| Total | fill in the blank 9 of 9$ |
Feedback Area
Asset minus residual value equals depreciable cost. Units-of-production allocates the cost of the asset equally over the units produced. The depreciation rate stays constant, no matter how many miles are driven each period. Keep in mind that the depreciation taken cannot reduce the book value of the truck below its residual value.
Question Content Area
b.
| blank | Account | Debit | Credit |
|---|---|---|---|
| blank |
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