On January 1, 2011, Keep Trucking, Inc. purchased a truck for $80,000 that has an estimated useful life of 10 years or 200,000 miles and a salvage value of $20,000. The truck was driven 24,000 miles in 2011 and 30,000 miles in 2012. Write in both the correct dollar amounts and the account titles involved.

Part A: Show the effect of the adjusting entry for the FIRST YEAR of depreciation using the straight-line depreciation method.

Part B: Show the effect of the adjusting entry for the FIRST YEAR of depreciation using the activity method.

Part C: Show the effect of the adjusting entry for the FIRST YEAR of depreciation using the double-declining balance method.

Part D: Show the amounts that would appear on the annual financial statements for December 31, 2012 (the SECOND YEAR) for each method. PUT AN ASTERISK(*) BY THE METHOD THAT BEST REPRESENTS THE ACTUAL USE OF THE TRUCK.

Part E: For the first two years of the equipment's life determine which method gives the dollar amount described AND indicate the financial statement where the information would be found.

Question

On January 1, 2011, Keep Trucking, Inc. purchased a truck for $80,000 that has an estimated useful life of 10 years or 200,000 miles and a salvage value of $20,000. The truck was driven 24,000 miles in 2011 and 30,000 miles in 2012. Write in both the correct dollar amounts and the account titles involved.

Part A: Show the effect of the adjusting entry for the FIRST YEAR of depreciation using the straight-line depreciation method.

Part B: Show the effect of the adjusting entry for the FIRST YEAR of depreciation using the activity method.

Part C: Show the effect of the adjusting entry for the FIRST YEAR of depreciation using the double-declining balance method.

Part D: Show the amounts that would appear on the annual financial statements for December 31, 2012 (the SECOND YEAR) for each method. PUT AN ASTERISK(*) BY THE METHOD THAT BEST REPRESENTS THE ACTUAL USE OF THE TRUCK.

Part E: For the first two years of the equipment's life determine which method gives the dollar amount described AND indicate the financial statement where the information would be found.

Quizplus · Accepted Answer

The Answer of On January 1, 2011, Keep Trucking, Inc. purchased a truck for $80,000 that has an estimated useful life of 10 years or 200,000 miles and a salvage value of $20,000. The truck was driven 24,000 miles in 2011 and 30,000 miles in 2012. Write in both the correct dollar amounts and the account titles involved.

Part A: Show the effect of the adjusting entry for the FIRST YEAR of depreciation using the straight-line depreciation method.

Part B: Show the effect of the adjusting entry for the FIRST YEAR of depreciation using the activity method.

Part C: Show the effect of the adjusting entry for the FIRST YEAR of depreciation using the double-declining balance method.

Part D: Show the amounts that would appear on the annual financial statements for December 31, 2012 (the SECOND YEAR) for each method. PUT AN ASTERISK(*) BY THE METHOD THAT BEST REPRESENTS THE ACTUAL USE OF THE TRUCK.

Part E: For the first two years of the equipment's life determine which method gives the dollar amount described AND indicate the financial statement where the information would be found.