Katie, your Accounting Manager, has asked you to calculate the depreciation for the new company car. The company purchased the new car on May 1, 2018.The purchase price was $22,600 and had a useful life of 3 years.The salvage or residual amount is 5% of the purchase price.Katie estimated that the car would be driven for 93,000 total miles.In year 1, the car was driven 48,900 miles. In year 2, the car was driven 35,180 miles, and in year 3, the car was driven 12,300 miles.Round the cost per mile to two decimal places. Calculate the total depreciation expense in Years 1 through 3 using the units of activity (production) method.

The objective of this question is to calculate the total depreciation expense for a company car over…

Answered: Katie, your Accounting Manager, has…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...

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Katie, your Accounting Manager, has asked you to calculate the depreciation for the new company car. The company purchased the new car on May 1, 2018.

The purchase price was $22,600 and had a useful life of 3 years.
The salvage or residual amount is 5% of the purchase price.
Katie estimated that the car would be driven for 93,000 total miles.
In year 1, the car was driven 48,900 miles. In year 2, the car was driven 35,180 miles, and in year 3, the car was driven 12,300 miles.

Round the cost per mile to two decimal places. Calculate the total depreciation expense in Years 1 through 3 using the units of activity (production) method.

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