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Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
Edition 17ISBN: 978-0078025778Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
Edition 17ISBN: 978-0078025778 Exercise 32
Units-of-Output Depreciation Method
Sexton Company acquired a truck for use in its business for $26,500 in a cash transaction. T he truck is expected to be used over a five-year period, will be driven approximately 18,000 miles per year, and is expected to have a value at the end of the five years of $4,800.
a. Compute the amount of depreciation that will be taken in the first two years of the truck's useful life if the actual miles driven are 16,000 and 18,200, respectively. Round the depreciation per mile to the nearest whole cent.
b. How does the amount of accumulated depreciation at the end of the second year compare with what it would have been had the company chosen the straight-line depreciation method?
Sexton Company acquired a truck for use in its business for $26,500 in a cash transaction. T he truck is expected to be used over a five-year period, will be driven approximately 18,000 miles per year, and is expected to have a value at the end of the five years of $4,800.
a. Compute the amount of depreciation that will be taken in the first two years of the truck's useful life if the actual miles driven are 16,000 and 18,200, respectively. Round the depreciation per mile to the nearest whole cent.
b. How does the amount of accumulated depreciation at the end of the second year compare with what it would have been had the company chosen the straight-line depreciation method?
Explanation
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In unit of output method depreciation is...
Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
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