On January 1,2010,Wasson Company purchased a delivery vehicle costing $40,000.The vehicle has an estimated 6-year life and a $4,000 residual value.Wasson estimates that the vehicle will be driven 100,000 miles.What is the vehicle's book value as of December 31,2011 assuming Wasson uses the units-of-production depreciation method and the vehicle was driven 10,000 miles during 2010 and 18,000 miles during 2011?

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Quizplus · Accepted Answer

Depreciation expense per mile ($0.36) = ($40,000 - $4,000) F1F1F1S1F1F1F10 100,000December 31, 2011 accumulated depreciation balance ($10,080) = $0.36 F1F1F1S1F1F1F10 28,000December 31, 2011 book value ($29,920) = $40,000 - $10,080

On January 1,2010,Wasson Company Purchased a Delivery Vehicle Costing $40,000