Grover Corporation purchased a truck at the beginning of 2014 for $93,600. The truck is estimated to have a salvage value of $3,600 and a useful life of 120,000 miles. It was driven 21,000 miles in 2014 and 29,000 miles in 2015. What is the depreciation expense for 2014?

Question

Quizplus · Accepted Answer

The first step is to calculate the depreciation per mile:
Depreciation per mile = (Cost - Salvage value) / Useful life in miles
Depreciation per mile = ($93,600 - $3,600) / 120,000 miles
Depreciation per mile = $0.75 per mile

To calculate the depreciation for 2014, we multiply the depreciation per mile by the number of miles driven in 2014:
Depreciation for 2014 = Depreciation per mile * Miles driven in 2014
Depreciation for 2014 = $0.75 per mile * 21,000 miles
Depreciation for 2014 = $15,750

Therefore, the correct answer is B) $15,750.

Grover Corporation Purchased a Truck at the Beginning of 2014