Celadon is a large trucking company that operates throughout the United States. Celadon uses the units-of-production (UOP) method to depreciate its trucks.
Celadon trades in trucks often to keep driver morale high and to maximize fuel economy. Consider these facts about one Volvo truck in the company's fleet: When acquired in 20X2, the tractor-trailer rig cost $285,000 and was expected to remain in service for 5 years or 1,000,000 miles. Estimated residual value was $35,000. During 20X2, the truck was driven 75,000 miles; during 20X3, 120,000 miles; and during 20X4, 210,000 miles. After 35,000 miles in 20X5, the company traded in the Volvo truck for a Mack rig. Celadon paid cash of $150,000. Determine Celadon's cost of the new truck. Journal entries are not required.