City View Limousine depreciates its stretch Hummer using the units-of-production depreciation method and bases usage on the miles driven per year.The estimated useful life of the vehicle is 250,000 miles.The vehicle was purchased for $115,000 and is not expected to have any residual value at the end of its life.It was driven a total of 40,000 miles during the first year of its useful life and 25,000 miles during the second year.What is the amount of Accumulated Depreciation recorded on the vehicle at the end of those two years?
A)$70,769
B)$29,900
C)$46,000
D)$18,400

Question

Quizplus · Accepted Answer

Depreciation expense (for both years)= (Cost − Residual value)× (Actual production this period ÷ Estimated total production)
= ($115,000 − $0)× [(25,000 miles + 40,000 miles)÷ 250,000 miles] = $29,900

City View Limousine Depreciates Its Stretch Hummer Using the Units-Of-Production