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Depreciation by units-of-activity Method Prior to adjustment at the end of the year, the balance...

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Accounting

Depreciation by units-of-activity Method

Prior to adjustment at the end of the year, the balance in Trucks is $211,400 and the balance in Accumulated DepreciationTrucks is $23,905. 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 $43,500 $5,700 140,000 miles 21,000 miles
2 61,200 8,000 280,000 $505 22,000
3 33,100 2,700 190,000 7,000 34,000
4 73,600 10,700 170,000 16,400 34,000

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.

Truck No. Rate per Mile (in cents) Miles Operated Credit to Accumulated Depreciation
1 $ 21,000 $
2 22,000
3 34,000
4 34,000
Total

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