asty Subs acquired a delivery truck on October 1, 2012, for $19,850. The company

Question

asty Subs acquired a delivery truck on October 1, 2012, for $19,850. The company estimates a residual value of $7,550 and a nine-year service life. It expects to drive the truck 102,500 miles. Actual mileage was 4,700 miles in 2012 and 17,300 miles in 2013.

Calculate depreciation expense using the activity-based method for 2012 and 2013, assuming a December 31 year-end. (Do not round intermediate calculations.)

asty Subs acquired a delivery truck on October 1, 2012, for $19,850. The company estimates a residual value of $7,550 and a nine-year service life. It expects to drive the truck 102,500 miles. Actual mileage was 4,700 miles in 2012 and 17,300 miles in 2013.

Explanation / Answer

19,850-7550/102500= 0.12 per mile

2012 4700* .12= 564

2013 17,300*.12 2076

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