Question

The questions is in the second photo, thanks!

CALCULATOR PRINTER VERSION BACK Exercise 9-7 (Part Level Submission) Wildhorse Co. purchased a delivery truck for $38,000 on January 1, 2019. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 14,400 in 2019 and 12,700 in 2020. (al) Your answer is correct. Calculate depreciable cost per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciable cost 0.35 per mile Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LINK TO TEXT Attempts: 1 of 15 used (a2) Your answer is correct. Compute depreciation expense for 2019 and 2020 using (1) the straight- line method, (2) the units-of-activity method, and (3) the double- declining-balance method. (Round depreciable 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 o decimal places, e.g. 2,125.) (1) Straight-line method (2) Units-of-activity method (3) Double-declining balance methods Click if you would like to show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LINK TO TEXT

Answer 1

Solution Cost of truck $38,000 Expected salvage value $2,000 Depreciable cost ($38,000- $2,000) Estimated useful life (in years) $36,000 8 Years Estimated useful life (in miles) 100,000 miles Depreciable cost per mile under units-of-activity method Required (a1) : Depreciable cost $36,000 Estimated miles 100,000 Depreciable cost per mile ($36,000/ 100,000) $0.36 Depreciable cost $0.36 per mile Required (a2): Depreciation expense for 2019 & 2020 (1) Straight line-method Depreciation per year Depreciable cost/useful life in years =$36,000/8 years = $4,500 Depreciation for Year 2019 $4,500 $4,500 Depreciation for Year 2020 (2) Units-of-activity method In this method, depreciation is calculated based on the actual activity of the asset during the year Depreciation for the year Depreciable cost per mile x Actual miles driven $5,184 Depreciation for Year 2019 ($o.36 x 14,400) Depreciation for Year 2020 ($0.36 x 12,700) $4,572 (3) The double-declining-balance method Straight-line Depreciation rate 100 % / 8 12.50% Double decline depreciation rate (12.50% x 2) 25.00% Year Depreciation WDV $38,000 x 25.00 % $28,500 x 25.00 % = $9,500 $7,125 $28,500 2019 $21,375 2020 Depreciation Expense 2019 2020 |(1) Straight line method |(2) Units-of-activity method (3) Double-declining-balance method $4,500 $4,500 $5,184 $4,572 $9,500 $7,125 Required (b1): Journal entry to record depreciation for 2019 Account Titles and Explanation Depreciation Expense Credit Debit $4,500 Accumulated Depreciation Truck $4,500 Required (b2): Wildhorse Co. Partial Balance Sheet December 31, 2019 Cost Truck $38,000 Less: Accumulated Depreciation Truck ($4,500) $33,500