Sheridan company purchased a delivery truck for 36000 on July 1,2025. The truck has an expected salavge value of 2000 and is expected to be driven 100000 miles over its estimated useful life of 8 years. Actual miles driven were 15000 in 2025 and 12000 in 2026. Sheridan uses the straight line method of depreciation. Prepare the journal entry to record 2025 depreciation
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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