Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in Trucks is $420,400 and the balance in Accumulated Depreciation-Trucks is $125,980. Details of the subsidiary ledger are as follows: Miles Operated During Year Truck No. 1 2 3 4 Truck No. 1 Cost $83,000 119,900 97,500 120,000 2 3 4 Estimated Residual Value $12,450 14,388 13,650 Estimated Useful Life 216,000 14,400 320,000 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. Credit to Accumulated Depreciation Rate per Mile (in cents) 230,000 miles 240,000 0000 Miles Operated 34,500 24,000 21,600 38,400 Total Accumulated Depreciation at Beginning of Year b. Journalize the entry to record depreciation for the year. $23,980 $78,000 $24,000 34,500 miles 24,000 21,600 38,400 pood

Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in Trucks is $420,400 and the balance in Accumulated Depreciation-Trucks is $125,980. Details of the subsidiary ledger are as follows: Miles Operated During Year Truck No. 1 2 3 4 Truck No. 1 Cost $83,000 119,900 97,500 120,000 2 3 4 Estimated Residual Value $12,450 14,388 13,650 Estimated Useful Life 216,000 14,400 320,000 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. Credit to Accumulated Depreciation Rate per Mile (in cents) 230,000 miles 240,000 0000 Miles Operated 34,500 24,000 21,600 38,400 Total Accumulated Depreciation at Beginning of Year b. Journalize the entry to record depreciation for the year. $23,980 $78,000 $24,000 34,500 miles 24,000 21,600 38,400 pood

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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Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in Trucks is $404,300 and the balance in Accumulated Depreciation—Trucks is $118,560. Details of the subsidiary ledger are as follows: TruckNo. Cost EstimatedResidualValue EstimatedUsefulLife AccumulatedDepreciationat Beginningof Year MilesOperatedDuringYear 1 $84,500 $12,675 230,000 miles — 34,500 miles 2 116,300 13,956 320,000 $23,260 32,000 3 91,000 12,740 200,000 $72,800 20,000 4 112,500 13,500 350,000 $22,500 42,000 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.…
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