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Company purchased a delivery truck for $38,800 on January 1, 2019
Company purchased a delivery truck for $38,800 on January 1, 2019. The truck has an expected salvage value of $1,800, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 13,700 in 2019 and 13,000 in 2020.
Assume that Cullumber uses the straight-line method. Show how the truck would be reported in the December 31, 2019, balance sheet. (Round answers to 0 decimal places, eg. 2,125.) Cullumber Company Partial Balance Sheet December 31, 2019 Equipment $ $38,800 Less: Accumulated Depreciation-Truck 4625 i $ 34175
Expert Solution
As cullumber uses straight line method we calculate depreciation by estimated life in years not by miles
Depreciation per year=(original cost-Salvage value)÷estimated life
=(38,800-1800)÷8
=$4625
Balance sheet
Delivery Truck. $38,800
Less Accumulater Dep/Dep $4625
$34,175
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