1. On January 1 of the current year (Year 1), our company purchased a truck for $75,000. The estimated useful life of the truck is 5 years or 100,000 miles. The residual value at the end of 5 years is estimated at $5,000. The truck's actual mileage was 22,000 miles in year 1 and 27,000 miles in year 2. What is the depreciation expense for the second year of use (year 2) using the units of production method?

2. On January 1, our company purchased a truck for $85,000. The estimated useful life of the truck is 4 years. The residual value at the end of 4 years is estimated at $5,000.

What is the depreciation expense for the second year of use if we use the double declining balance method?

What is the accumulated depreciation balance at the end of the second year of use if we use the double declining balance method?

What is the book value at the end of the second year of use if we use the double declining balance method?

3. On January 1, our company purchased a truck for $80,000. The estimated useful life of the truck is 4 years. The residual value at the end of 4 years is estimated at $10,000. What is the depreciation expense for the third year of use if we use the straight-line method?

4. Our company uses the accounts receivable percentage method to estimate bad debt expense for the year. We had the following account balances in our unadjusted trial balance at the end of the year (December 31): accounts receivable, debit balance of $150,000; provision for bad debts, debit balance of $1,000. We estimate that 3.5% of accounts receivable at the end of the year are uncollectible. How much will be charged to bad debt expense when we record the adjusting entry?

5. Our company uses the percentage of sales method to estimate bad debt expenses for the year. Our bad debt allowance account has a credit balance of $1,000 before the adjustment entry for bad debt expense. We have estimated that 2% of net credit sales will be uncollectible for the current year. Net credit sales for the year totaled $200,000. How much will be charged to bad debt expense when we record the adjusting entry?

Answer rating: 100% (QA)

Lets calculate the values step by step 1 Depreciation Expense using the Units of Production Method The depreciation expense for the second year can be calculated based on the trucks mileage Total esti... View the full answer