Linton Company purchased a delivery truck for $34,000 on July 1, 2025. The truck has an expected
Question:
Linton Company purchased a delivery truck for $34,000 on July 1, 2025. 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 15,000 in 2025 and 12,000 in 2026. Linton uses the straight-line method of depreciation.
Instructions
a. Compute depreciation expense for 2025 and 2026.
b. Prepare the journal entry to record 2025 depreciation.
c. Prepare the journal entry to record 2026 depreciation.
d. Show how the truck would be reported in the December 31, 2026, balance sheet.
Step by Step Answer:
a b c d 2025 3400020008 X x 12 2000 4000 ...View the full answer
Accounting Tools For Business Decision Making
ISBN: 9781119791058
8th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Jill E. Mitchell
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
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