Chapter 9, Problem 9.7E

(a)(1)

To determine

Depreciation: Depreciation refers to the reduced value of a fixed asset due to its wear and tear or obsolescence. It is a method of distributing the cost of the fixed assets over its estimated useful life.

To compute: the amount of depreciation expense of truck as per straight line method of Company L.

(2)

To determine

To compute: the amount of depreciation expense of truck as per units of activity method of Company L.

(3)

To determine

To compute: the amount of depreciation expense of truck as per double declining balance method of Company L.

(b)(1)

To determine

To record: the journal entry to depreciation for the truck of Company L.

(2)

To determine

To show: the reporting of truck in balance sheet as on December 31,2015 of Company L.