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Swift Trucking Company purchased a long-haul tractor trailer for $400,000 at the beginning of the...

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Accounting

Swift Trucking Company purchased a long-haul tractor trailer for $400,000 at the beginning of the year. The expected useful life of the tractor-trailer rig was eight years or 500,000 miles. Salvage value was estimated to be $40,000. During the first five years of use, the rig logged the following usage in miles: Year 1 was 80,000 miles, Year 2 was 75,000 miles, Year 3 was 80,000 miles, Year 4 was 76,000 miles and Year 5 was 60,000 miles for a total of 371,000 miles. Calculate the depreciation expense to be taken on the tractor-trailer for each year using the units-of-production method and then calculate the depreciation expense using the straight line method. Which method gives you higher total depreciation charges over the five-year period?

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