Diaz Company purchased a truck that cost $36,000. 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 $5,000. If the truck is driven 26,000 miles in the current accounting period, what would be the amount of depreciation expense for the year? (Use the Unit of Production Method to solve.)

Question

Quizplus · Accepted Answer

($36,000 cost - $5,000 salvage value)/100,000 miles = $0.31/mile depreciation; $0.31/mile x 26,000 miles = $8,060 depreciation expense.

Diaz Company Purchased a Truck That Cost $36,000