Prior to adjustment at the end of the year, the balance in Trucks is $300,900 an

Question

Prior to adjustment at the end of the year, the balance in Trucks is $300,900 and the balance in Accumulated Depreciation-Trucks is $88,200. Details of the subsidiary ledger are as follows: Truck No. 1 Cost $100,000 Estimated Residual Value $13,000 Estimated Useful Life 300,000 Accumulated Depreciation at Beginning of Year —— Miles Operated During Year 30,000 Truck No. 2 Cost 72,900 Estimated Residual Value 9,900 Estimated Useful Life 300,000 Accumulated Depreciation at Beginning of Year $60,000 Miles Operated During Year 25,000 Truck No. 3 Cost 38,000 Estimated Residual Value 3,000 Estimated Useful Life 200,000 Accumulated Depreciation at Beginning of Year 8,050 Miles Operated During Year 45,000 Truck No. 4 Cost 90,000 Estimated Residual Value 13,000 Estimated Useful Life 200,000 Accumulated Depreciation at Beginning of Year 20,150 Miles Operated During Year 40,000 Required: (1) Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year. (2) Journalize the entry to record depreciation for the year.

Explanation / Answer

Balance of Trucks $300900 Balance in accumulated Depreciation $88200 Truck Cost Estimated Residual Value Estimated useful life Accumulated Depreciation at the beginning of year Miles operated during year Depreciation per Mile Depreciation for Year 1 100000 13000 300000 0 30000 0.29 8700 2 72900 9900 300000 60000 25000 0.21 5250 3 38000 3000 200000 8050 45000 0.175 7875 4 90000 13000 200000 20150 40000 0.385 15400 Total 37225 Journal Entry Depreciation A/c………Dr 37225 To Accumulated Depreciation A/c 37225 (Being Depreciatopn for the year credited to accumulated depreciation account)

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