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?

Question

Jovani Mcbride

Business

24 September, 01:03

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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Aubree Alexander · Answer 1

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