Question

Question 19 --/1 View Policies Current Attempt in Progress Novak Company purchased a delivery truck for $27,000 on January 1, 2020. The truck has an expected salvage value of $1,000, and is expected to be driven 100,000 miles over its estimated useful life of 10 years. Actual miles driven were 13,400 in 2020 and 13,900 in 2021. Calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciation expense $ per mile eTextbook and Media List of Accounts Compute depreciation expense for 2020 and 2021 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining-balance method. (Round depreciation cost per unit to 2 decimal places, e.g. 0.50 and depreciation rate to O decimal places, e.g. 15%. Round final answers to 0 decimal places, e.g. 2,125.) Depreciation Expense 2020 2021 (1) Straight-line method " (2) Units-of-activity method - (3) Declining-balance method $ -

Answer 1

a) Depreciation expense per mile = (27000-1000)/100000 = 0.26 per mile

b) Calculate following

		2020	2021
a	Straight line	(26000/10) = 2600	2600
b	Units of activity	13400*.26 = 3484	3614
c	Double decline	27000*20% = 5400	27000*80%*20% = 4320

c) Journal entry

Account title and explanation	Debit	Credit
Depreciation expense	2600
Accumulated depreciation-delivery truck		2600

d) Balance sheet

as on December 31,2020

Delivery truck	27000
Less: Accumulated depreciation-Delivery truck	-2600
	24400