Under the units-of-production depreciation method, the depreciation expense is based on the actual usage of the asset. First, we need to calculate the depreciable cost of the truck. The depreciable cost is the cost of the asset minus its salvage value. Depreciable cost = Purchase price - Salvage value Depreciable cost = $25,000 - $6,000 = $19,000 Next, we calculate the depreciation rate per unit, which is the depreciable cost divided by the total expected usage of the asset. Depreciation rate per unit = Depreciable cost / Total expected usage Depreciation rate per unit = $19,000 / 125,000 miles = $0.152 per mile Now, we can calculate the depreciation expense for each year by multiplying the depreciation rate per unit by the actual usage of the truck each year. Year 1 Depreciation = Depreciation rate per unit * Year 1 usage Year 1 Depreciation = $0.152 * 26,000 miles = $3,952 Year 2 Depreciation = Depreciation rate per unit * Year 2 usage Year 2 Depreciation = $0.152 * 30,000 miles = $4,560 Year 3 Depreciation = Depreciation rate per unit * Year 3 usage Year 3 Depreciation = $0.152 * 40,000 miles = $6,080 The book value of the