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Prior to adjustment at the end of the year, the balance in Trucks is $296,900 and the balance in Accumulated Depreciation-Trucks is $99,740. Details of the subsidiary ledger are as follows: Miles Operated During Year Truck No. 1 2 3 4 Truck No. 1 2 3 4 Total Cost $80,000 54,000 72,900 90,000 Feedback Estimated Residual Value $15,000 6,000 10,900 22,800 a. Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year. Round the rate per mil to two decimal places. Estimated Useful Life Rate per Mile (in cents) 250,000 miles 300,000 miles 200,000 miles 240,000 miles 21,000 33,500 8,000 22,500 Miles Operated December 31 Depreciation Expense-Trucks Accumulated Depreciation at Beginning of Year Credit to Accumulated Depreciation $ Accumulated Depreciation-Trucks $14,400 60,140 25,200 Check My Work 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. ✓ 21,000 miles 33,500 miles b. Journalize the entry on December 31 to record depreciation for the year. If an amount box does not require an entry, leave it blank. 8,000 miles 22,500 miles 88

Prior to adjustment at the end of the year, the balance in Trucks is $296,900 and the balance in Accumulated Depreciation-Trucks is $99,740. Details of the subsidiary ledger are as follows: Miles Operated During Year Truck No. 1 2 3 4 Truck No. 1 2 3 4 Total Cost $80,000 54,000 72,900 90,000 Feedback Estimated Residual Value $15,000 6,000 10,900 22,800 a. Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year. Round the rate per mil to two decimal places. Estimated Useful Life Rate per Mile (in cents) 250,000 miles 300,000 miles 200,000 miles 240,000 miles 21,000 33,500 8,000 22,500 Miles Operated December 31 Depreciation Expense-Trucks Accumulated Depreciation at Beginning of Year Credit to Accumulated Depreciation $ Accumulated Depreciation-Trucks $14,400 60,140 25,200 Check My Work 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. ✓ 21,000 miles 33,500 miles b. Journalize the entry on December 31 to record depreciation for the year. If an amount box does not require an entry, leave it blank. 8,000 miles 22,500 miles 88

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Depreciation by units-of-activity method Prior to adjustment at the end of the year, the balance in Trucks is $296,900 and the balance in Accumulated Depreciation-Trucks is $99,740. Details of the subsidiary ledger are as follows: Miles Operated During Year Truck No. 1 2 3 4 1 2 3 Rate per Mile Truck No. (in cents) $ 4 Cost Total $80,000 54,000 72,900 90,000 Feedback Estimated Residual Value $15,000 6,000 10,900 22,800 a. Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year. Round the rate per mil to two decimal places. Estimated Useful Life 1000 250,000 miles 300,000 miles 200,000 miles 240,000 miles Miles Operated 21,000 33,500 8,000 22,500 December 31 Depreciation Expense-Trucks Accumulated Depreciation at Beginning of Year Credit to Accumulated Depreciation $ Accumulated Depreciation-Trucks 0000 $ $14,400 60,140 25,200 21,000 miles 33,500 miles 8,000 miles 22,500 miles Check My Work 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. b. Journalize the entry on December 31 to record depreciation for the year. If an amount box does not require an entry, leave it blank.
Transcribed Image Text:Depreciation by units-of-activity method Prior to adjustment at the end of the year, the balance in Trucks is $296,900 and the balance in Accumulated Depreciation-Trucks is $99,740. Details of the subsidiary ledger are as follows: Miles Operated During Year Truck No. 1 2 3 4 1 2 3 Rate per Mile Truck No. (in cents) $ 4 Cost Total $80,000 54,000 72,900 90,000 Feedback Estimated Residual Value $15,000 6,000 10,900 22,800 a. Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year. Round the rate per mil to two decimal places. Estimated Useful Life 1000 250,000 miles 300,000 miles 200,000 miles 240,000 miles Miles Operated 21,000 33,500 8,000 22,500 December 31 Depreciation Expense-Trucks Accumulated Depreciation at Beginning of Year Credit to Accumulated Depreciation $ Accumulated Depreciation-Trucks 0000 $ $14,400 60,140 25,200 21,000 miles 33,500 miles 8,000 miles 22,500 miles Check My Work 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. b. Journalize the entry on December 31 to record depreciation for the year. If an amount box does not require an entry, leave it blank.
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