NEED ANSWER ASAP PLEASE !!! Linton Company purchased a delivery truck for $33,00
ID: 2395858 • Letter: N
Question
NEED ANSWER ASAP PLEASE !!!
Linton Company purchased a delivery truck for $33,000 on January 1, 2017. The truck has an expected salvage value of $1,300, and is expected to be driven 109,000 miles over its estimated useful life of 9 years. Actual miles driven were 15,400 in 2017 and 12,500 in 2018.
Compute depreciation expense for 2017 and 2018 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining-balance method. (Round depreciation cost per unit to 2 decimal places, e.g. 0.50 and depreciation rate to 0 decimal places, e.g. 15%. Round final answers to 0 decimal places, e.g. 2,125.)
Assume that Linton uses the straight-line method. Prepare the journal entry to record 2017 depreciation.
Assume that Linton uses the straight-line method. Show how the truck would be reported in the December 31, 2017, balance sheet. (Round answers to 0 decimal places, e.g. 2,125.)
Calculate depreciation expense per mile under units-of-activity method. ( Depreciation expense per mile SHOW LIST OF ACCOUNTSExplanation / Answer
Depreciation per mile under units of activity method
= [Cost – Salvage Value ] / Total Miles Driven
= [$33,000 – 1,300] / 109,000 Miles
= $31,700 / 109,000 Miles
= $0.29 per Mile
“Depreciation Expense = $0.29 per Mile“
Depreciation Expense for 2017 and 2018
Depreciation Expense
2017
2018
(1) Straight Line Method
$3,522
$3,522
(2) Units of Activity Method
$4,466
$3,625
(3) Declining Balance Method
$7,333
$5,704
(1)Straight Line Method
= [Cost – Salvage Value] / Useful Life
= [$33,000 – 1,300] /98 Years
= $3,522 per year
(2)Units of Activity Method
2017 = 15,400 Miles x $0.29 per Mile = $4,466
2018 = 12,500 Miles x $0.29 per Mile = $3,625
(3)Declining Balance Method
Depreciation = Beginning Balance x 2 x Straight Line Depreciation Rate
Straight Line Depreciation Rate = 1 / Useful Life = 1 / 9 = 0.1111
2017 = $33,000 x 2 x 0.1111 = $7,333
2018 =[ $33,000 – 7,333] x 2 x 0.1111 = $5,704
Journal Entry to record 2017 Depreciation Under Straight Line Method
Account Titles and Explanation
Debit ($)
Credit($)
Depreciation Expenses A/c
$3,522
To Accumulated Depreciation Expenses A/c
$3,522
[Entry to record 2017 Depreciation Under Straight Line Method ]
Balance Sheet Presentation
LINTON COMPANY
Partial Balance Sheet
As at December 31, 2017
Property Plant and Equipment / Delivery Truck
$33,000
Less
Accumulated Depreciation
$3,522
$29,478
Depreciation Expense
2017
2018
(1) Straight Line Method
$3,522
$3,522
(2) Units of Activity Method
$4,466
$3,625
(3) Declining Balance Method
$7,333
$5,704
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