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ID: 2545614 • Letter: H
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he Blake a GroupMe Il Netflix-k isu D2L rKSUIMyKSU n Facebook YouTube P Pandora Owl Express AJC y Twitter D Ch5-6 Help Save & Exit On January 1, Year 1, Friedman Company purchased a truck that cost $27,000. The truck had an expected useful lfe of 100,000 miles over 8 ears and an $7000 salvage value. During Year 2, Friedman drove the truck 38,000 miles. The amount of depreciation expense recognized in Year 2 assuming that Friedman uses the units-of production method is: (Do not round intermedilate celculations.) Multiple Choice $10,260 $2,500 $7600 Prey 31 of 35E Next >Explanation / Answer
Answer: The correct answer is $7,600
Depreciable Value = Cost of Truck – Salvage Value
Depreciable Value = $27,000 - $7,000
Depreciable Value = $20,000
Depreciation per miles = Depreciable Value / Miles
Depreciable Value per miles = $20,000 /100,000
Depreciable Value per Miles =$ 0.2
Amount of Depreciation Expense in Year 2 = Depreciable Value per Miles * 38,000
Amount of Depreciation Expense in Year 2 = $0.2 * 38,000
Amount of Depreciation Expense in Year 2 = $7,600
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