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21 September, 07:10

Dinkins company purchased a truck that cost $46,000. the company expected to drive the truck 100,000 miles over its 5-year useful life, and the truck had an estimated salvage value of $8,000. if the truck is driven 26,000 miles in the current accounting period, what would be the amount of depreciation expense for the year?

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  1. 21 September, 08:51
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    Cost of truck = $46,000

    Life = 100,000 miles or 5 years

    Salvage value = $8,000

    Salvage value per mile = (46,000-8,000) / 100,000 = $0.38/mile

    For the current 26,000 miles covered,

    Depreciation expense = 0.38*26,000 = $9,880
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