Splish Ltd purchased a new delivery truck on January 1 2017 The truck cost $43,040 and was estimated to have a residual value of $1200 It was estimated that the truck would be driven $23,000 kilometres for the company over its useful life of five years During 2017 the truck was driven $96,300 kilometres and $1,29,200 kilometres in 2018.

a. Calculate depreciation expense per mile under units-of-activity method. 

b. Compute depreciation expense for 2017 and 2018 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining-balance method.

				Depreciation Expense
				2017		2018
(1)		Straight-line method		$		$
(2)		Units-of-activity method		$		$
(3)		Declining-balance method		$		$

c. Assume that Splish Ltd uses the straight-line method. Prepare the journal entry to record 2017 depreciation.

d. Assume that Splish Ltd uses the straight-line method. Show how the truck would be reported in the January 1 2017, balance sheet. 

Answer rating: 100% (QA)

Depreciation expense per mile under units of activity method Purchase price of the truck 4304000 Les... View the full answer