Dinkins Company purchased a truck that cost $93,000. The company expected to drive the truck 100,000 miles over its 5-year useful life, and the truck had an estimated salvage value of $14,500. If the truck is driven 35,500 miles in the current accounting period, what would be the amount of depreciation expense for the year? (Do not round intermediate calculations.)

Question

Quizplus · Accepted Answer

First, we need to calculate the depreciation per mile using the straight-line method:

Depreciation per mile = (cost - salvage value) / total miles 
Depreciation per mile = ($93,000 - $14,500) / 100,000 
Depreciation per mile = $0.785

Then, we can calculate the depreciation expense for the current year by multiplying the depreciation per mile by the number of miles driven in the current accounting period:

Depreciation expense = depreciation per mile x miles driven 
Depreciation expense = $0.785 x 35,500 
Depreciation expense = $27,867.50

Therefore, the answer is B, $27,868.

Dinkins Company Purchased a Truck That Cost $93,000