Tanger Company purchased a delivery truck for $36,000 on January 1, 2014. The truck has an expected

Question:

Tanger Company purchased a delivery truck for $36,000 on January 1, 2014. The truck has an expected salvage value of $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 2014 and 12,000 in 2015.


Instructions

(a) Compute depreciation expense for 2014 and 2015 using

(1) The straight-line method,

(2) The units-of-activity method,

(3) The double-declining-balance method.

(b) Assume that Tanger uses the straight-line method.

(1) Prepare the journal entry to record 2014 depreciation.

(2) Show how the truck would be reported in the December 31, 2014, balance sheet.


Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial and managerial accounting

ISBN: 978-1118016114

1st edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Question Posted: