Burger Chef acquired a delivery truck on March 1, 2021, for $27,800. The company estimates a residual value of $3,000 and a four- year service life. It expects to drive the truck 62,000 miles. Actual mileage was 13,800 miles in 2021 and 13,400 miles in 2022. Calculate depreciation expense using the activity-based method for 2021 and 2022, assuming a December 31 year-end. (Do not round intermediate calculations.) Year 2021 2022 Depreciation Expense

Burger Chef acquired a delivery truck on March 1, 2021, for $27,800. The company estimates a residual value of $3,000 and a four- year service life. It expects to drive the truck 62,000 miles. Actual mileage was 13,800 miles in 2021 and 13,400 miles in 2022. Calculate depreciation expense using the activity-based method for 2021 and 2022, assuming a December 31 year-end. (Do not round intermediate calculations.) Year 2021 2022 Depreciation Expense

Name: Burger Chef acquired a delivery truck on March 1, 2021, for $27,800.
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Description: Burger Chef acquired a delivery truck on March 1, 2021, for $27,800. The company estimates a residual value of $3,000 and a four-year service life. It expects to drive the truck 62,000 miles. Actual mileage was 13,800 miles in 2021 and 13,400 miles

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

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Question

Burger Chef acquired a delivery truck on March 1, 2021, for $27,800. The company estimates a residual value of $3,000 and a four-
year service life. It expects to drive the truck 62,000 miles. Actual mileage was 13,800 miles in 2021 and 13,400 miles in 2022.
Calculate depreciation expense using the activity-based method for 2021 and 2022, assuming a December 31 year-end. (Do not
round intermediate calculations.)
Year
2021
2022
Depreciation
Expense

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