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Question - Speedy Ltd purchased a delivery truck on 1 July 2007 for $450 000. It had an estimated salvage value of $150 000. The estimated number of kilometers to be driven was 150 000. The truck was depreciated using the units-of-production method. Speedy Ltd's financial period ends on 31 December. The truck was driven the following distances:
During 6 months to 31 December 2007, 25 000 km
During 12 months to 31 December 2008, 75 000 km
During 12 months to 31 December 2009, 40 000 km
What was the depreciation expense for the year ended 31 December 2008?
a. $50 000
b. $80 000
c. $150 000
d. $225 000
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