Question

Tamarisk, Inc. purchased a delivery truck for $29,200 on January 1, 2019. The truck has an expected salvage value of $2,200, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 16,100 in 2019 and 12,800 in 2020.

A. Calculate depreciable cost per mile under units-of-activity method.

B.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 0 decimal places, e.g. 15%. Round final answers to 0 decimal places, e.g. 2,125.)

				Depreciation Expense
				2019		2020
(1)		Straight-line method		$enter a dollar amount rounded to 0 decimal places		$enter a dollar amount rounded to 0 decimal places
(2)		Units-of-activity method		$enter a dollar amount rounded to 0 decimal places		$enter a dollar amount rounded to 0 decimal places
(3)		Double-declining-balance method		$enter a dollar amount rounded to 0 decimal places		$enter a dollar amount rounded to 0 decimal places

C.

Assume that Tamarisk uses the straight-line method. Prepare the journal entry to record 2019 depreciation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 2,125.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

D. Assume that Tamarisk uses the straight-line method. Show how the truck would be reported in the December 31, 2019, balance sheet. (Round answers to 0 decimal places, e.g. 2,125.)
Tamarisk, Inc. Partial Balance Sheet choose the accounting period For the Month Ended December 31, 2019December 31, 2019For the Year Ended December 31, 2019
enter a balance sheet item			$enter a dollar amount
select between addition and deduction AddLess : enter a balance sheet item			enter a dollar amount
			$enter a total of the two previous amounts

Answer 1

A. Calculate depreciable cost per mile under units-of-activity method.

Depreciation cost per mile = (29200-2200)/100000 = 0.27 per mile

B.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 0 decimal places, e.g. 15%. Round final answers to 0 decimal places, e.g. 2,125.)

				Depreciation Expense
				2019		2020
(1)		Straight-line method		(29200-2200)/8 = 3375		3375
(2)		Units-of-activity method		16100*.27 = 4347		12800*.27 = 3456
(3)		Double-declining-balance method		29200*25% = 7300		29200*75%*25% = 5475

C.

Assume that Tamarisk uses the straight-line method. Prepare the journal entry to record 2019 depreciation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 2,125.)

Account Titles and Explanation	Debit	Credit
Depreciation expense	3375
Accumulated depreciation-delivery truck		3375

D. Assume that Tamarisk uses the straight-line method. Show how the truck would be reported in the December 31, 2019, balance sheet. (Round answers to 0 decimal places, e.g. 2,125.)
Tamarisk, Inc. Partial Balance Sheet December 31, 2019
Delivery truck			29200
Less: Accumulated depreciation			-3375
			$25825