On January 1, Year 1, Friedman Company purchased a truck that cost $33,000. The truck had an expected useful life of 100,000 miles over 8 years and an $7,000 salvage value. During Year 2, Friedman drove the truck 34,000 miles. The amount of depreciation expense recognized in Year 2 assuming that Friedman uses the units-of-production method is: (Do not round intermediate calculations.)

Question

Chad Rose

Business

26 January, 10:08

On January 1, Year 1, Friedman Company purchased a truck that cost $33,000. The truck had an expected useful life of 100,000 miles over 8 years and an $7,000 salvage value. During Year 2, Friedman drove the truck 34,000 miles. The amount of depreciation expense recognized in Year 2 assuming that Friedman uses the units-of-production method is: (Do not round intermediate calculations.)

+2

Answers (1)

Know the Answer?

Valeria Barry · Answer 1

Depreciation expense-Year 2 = $8840

Explanation:

It is important to note that the depreciation is based on the units-of-production method and in case of the truck, we take 100000 miles as its useful life or total units of production.

The depreciable value of the truck is Cost - salvage value,

Depreciable Value = 33000 - 7000 = 26000

The depreciation for year 2 based on units-of-production is,

Depreciation expense for year 2 = 26000 * 34000/100000 = $8840