On January 1, Year 1, Friedman Company purchased a truck that cost $48,000. The truck had an expected useful life of 100,000 miles over 8 years and an $8,000 salvage value. During Year 2, Friedman drove the truck 18,500 miles. The amount of depreciation expense recognized in Year 2 assuming that Friedman uses the units-of-production method is:
A) $8,880.
B) $7,400.
C) $6,000.
D) $5,000.

Question

Quizplus · Accepted Answer

($48,000 - $8,000) ÷ 100,000 miles = $0.40 per mile depreciation expense. 18,500 miles × $0.40 per mile = $7,400 depreciation expense in Year 2.

On January 1, Year 1, Friedman Company Purchased a Truck