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Depreciation by units-of-output method
Prior to adjustment at the end of the year, the balance in Trucks is $296,900 and the balance in Accumulated Depreciation-Trucks is $99,740. Details of the subsidiary ledger are as follows:
Accumulated
Miles
Estimated
Depreciation
Operated
Truck
Residual
Useful
at Beginning
During
No.
Cost
Value
Life
of Year
Year
1
$80,000
$15,000
250,000 miles
-
21,000 miles
2
54,000
6,000
300,000
$14,400
33,500
3
72,900
10,900
200,000
60,140
8,000
4
90,000
22,800
240,000
25,200
22,500
a. Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year.
b. Journalize the entry to record depreciation for the year.
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