Prior to adjustment at the end of the year, the balance in Trucks is $293,124 and the
Question:
Prior to adjustment at the end of the year, the balance in Trucks is $293,124 and the balance in Accumulated Depreciation—Trucks is $101,530. Details of the subsidiary ledger are as follows:
Estimated | Accumulated Depreciation at | Miles Operated | |||
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Truck No. | Cost | Residual Value | Useful Life | Beginning of Year | During Year |
1 | $76,065 | $14,590 | 245,900 miles | — | 21,000 miles |
2 | 50,605 | 6,220 | 295,900 miles | $14,430 | 33,900 miles |
3 | 76,024 | 13,590 | 201,400 miles | 61,850 | 7,900 miles |
4 | 90,430 | 22,810 | 241,500 miles | 25,250 | 22,500 miles |
A. | Determine for each truck the depreciation rate per mile and the amount to be credited to the accumulated depreciation section of each subsidiary account for the miles operated during the current year. Keep in mind that the depreciation taken cannot reduce the book value of the truck below its residual value. Round rate per mile answers to the nearest cent. |
B. | Journalize the entry on December 31 to record depreciation for the year. Refer to the Chart of Accounts for exact wording of account titles. |
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Chart of Accounts
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A. Determine for each truck the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year. Keep in mind that the depreciation taken cannot reduce the book value of the truck below its residual value. Round rate per mile answers to the nearest cent.
Truck No. | Rate per Mile | Miles Operated | Credit to Accumulated Depreciation |
1 | 20,200 | ||
2 | 32,100 | ||
3 | 7,700 | ||
4 | 22,900 | ||
Total |
B. Journalize the entry on Dec. 31 to record depreciation for the year. Refer to the Chart of Accounts for exact wording of account titles.1
JOURNAL
ACCOUNTING EQUATION
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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1 | Adjusting Entries | |||||||
2 | ||||||||
3 |
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac