Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance in Trucks is $385,500 and the balance in Accumulated Depreciation—Trucks is $115,400. Details of the subsidiary ledger are as follows: Truck No. Cost Estimated Residual Value Estimated Useful Life Accumulated Depreciation at Beginning of Year Miles Operated During Year 1 $78,500   $11,775   240,000 miles —       36,000 miles 2 114,500   13,740   320,000   $22,900       32,000   3 90,000   12,600   213,000   $72,000       21,300   4 102,500   12,300   370,000   $20,500       44,400   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. Truck No. Rate per Mile (in cents) Miles Operated Credit to Accumulated Depreciation 1 $   36,000   $   2 $   32,000   $   3 $   21,300   $   4 $   44,400   $         Total   $   b.  Journalize the entry to record depreciation for the year.   Depreciation Expense-Trucks        Accumulated Depreciation-Trucks

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
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Depreciation by units-of-activity Method

Prior to adjustment at the end of the year, the balance in Trucks is $385,500 and the balance in Accumulated Depreciation—Trucks is $115,400. Details of the subsidiary ledger are as follows:

Truck
No.
Cost Estimated
Residual
Value
Estimated
Useful
Life
Accumulated
Depreciation
at Beginning
of Year
Miles
Operated
During
Year
1 $78,500   $11,775   240,000 miles —       36,000 miles
2 114,500   13,740   320,000   $22,900       32,000  
3 90,000   12,600   213,000   $72,000       21,300  
4 102,500   12,300   370,000   $20,500       44,400  

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.



Truck No.

Rate per Mile
(in cents)

Miles
Operated
Credit to
Accumulated
Depreciation
1 $   36,000   $  
2 $   32,000   $  
3 $   21,300   $  
4 $   44,400   $  
      Total   $  

b.  Journalize the entry to record depreciation for the year.

  Depreciation Expense-Trucks     
  Accumulated Depreciation-Trucks 
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