Ay 3. Item 3 On January 1, Year 1, Friedman Company purchased a truck that cost $50,000. The truck had an expected useful life of 100,000 miles over 8 years and a $9,000 salvage value. During Year 2, Friedman drove the truck 26,000 miles. The company uses the units-of-production method. The amount of depreciation expense recognized in Year 2 is: (Do not round intermediate calculations.) Multiple Choice $13,000. $10,660. $5,125. $6,250

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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.