Question

Prior to adjustment at the end of the year, the balance in Trucks is $298,000 and the balance in Accumulated Depreciation—Trucks is $35,478. Details of the subsidiary ledger are as follows:

Truck No.	Cost	Estimated Residual Value	Estimated Useful Life (in miles)	Accumulated Depreciation at Beginning of Year	Miles Operated During Year
1	$56,700	7,400	170,000	-	26,000
2	82,100	10,700	340,000	$678	27,000
3	45,100	3,700	230,000	9,500	41,000
4	114,100	16,600	250,000	25,300	50,000

a. 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. Round the rate per mile to two decimal places and credit to accumulated depreciation to the nearest dollar.

Truck No.

Rate per Mile (in cents)

Miles Operated

Credit to Accumulated Depreciation

1

$

26,000

$

2

27,000

3

41,000

4

50,000

Total

$

b. Journalize the entry to record depreciation for the year.

	Depreciation Expense-Trucks
	Accumulated Depreciation-Trucks

Answer 1

Answer to a.

(1)Truck No.	(2)Cost($)	(3)Estimated Residual Value($)	(4)Estimated Useful Life (in miles)	(5)Rate($) per Mile={(2)-(3)}/(4)	(6)Miles Operated	(7)Credit to Accumulated Depreciation($)=(5)*(6)
1	56700	7400	170000	.29	26000	7540
2	82100	10700	340000	.21	27000	5670
3	45100	3700	230000	.18	41000	7380
4	114100	16600	250000	.39	50000	19500

TOTAL   40090

b. Journal Dr. Cr.

Depreciation Expense-Trucks Dr. $40090

To Accumulated Depreciation-Trucks $40090

(Depreciaton expenses on the trucks being provided for the year)