Jackson Incorporate purchased a truck for $36,000.The truck had a useful life of 150,000 miles over 4 years and a $6,000 salvage value.Jackson drove the truck 40,000 miles in Year 1 and 24,000 miles in Year 2.If Jackson uses the units-of-production method,what is the accumulated depreciation at the end of Year 2?

Question

Quizplus · Accepted Answer

Depreciation rate = (Cost of $36,000 - Salvage value of $6,000)÷ Estimate of 150,000 miles = $0.20 per mile
Year 1 Depreciation expense = 40,000 miles × $0.20 per mile = $8,000
Year 2 Depreciation expense = 24,000 miles × $0.20 per mile = $4,800
Accumulated depreciation at the end of Year 2 = $8,000 + $4,800 = $12,800

Jackson Incorporate Purchased a Truck for $36,000