Question

orang TUTUI LUCU URUCUST. E10.7 (LO 2) Tanger Interiors purchased a delivery truck for R$38,000 on January 1, 2020. The truck has an expected residual value of R$6,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2020 and 12,000 in 2021. Compute depreciation using different methods. Instructions a. 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. b. Assume that Tanger uses the straight-line method. 1. Prepare the journal entry to record 2020 depreciation. 2. Show how the truck would be reported in the December 31, 2020, statement of financial position.

Answer 1

a) 1 Stucight line method Dep per year : R$ 38,000 - R$ 6000 2 R$ 32.000 R$ 4000 ... Depueciation Expense tou 2020 - R$ 4000 2001 - Rd 4000 (2) units of activity method 2020 - R$ 32.000 – x 15000 = 100.000 R$ 4800 2021 - R$ 32,000 x 12000 100.000 a R$ 8840 6) Double Declining Balance method Depueciation uate : 12.5% + 2x12.5% -25% 2020 – R$ 38,000 x 25% = R$ 9500 2021 - R$ 28,500 x 25% = R$ 7125

(6 (1) Jounal entay. R$ 4000 Depueciation Expense All to Puuck Ale R$4000 (Q) Reporteña a on Dec 31, 2020 Bal valere - R$ 38,000 - R$ 4000 R$ 34000 Asset - R$ 34,000