Futronics Purchased a Truck at the Beginning of 2019 for $41,500

question 99

Essay

Futronics purchased a truck at the beginning of 2019 for $41,500 and decided to depreciate it over a 6-year period using the straight-line method. The estimated residual value was $5,500. At the beginning of 2020, the company determined that a 4-year life should have been used to depreciate the truck. The estimated residual value was not affected by the revision in the asset's life.
A)Determine the amounts to be recorded as depreciation expense for 2019 and 2020.
B)What factors may have influenced the change in useful life?

• A)Determine the amounts to be recorded as depreciation expense for 2019 and 2020.
• B)What factors may have influenced the change in useful life?

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Definitions:

Cost Reconciliation Report

A report that outlines the differences or reconciliations between the cost of goods manufactured and the cost of goods sold.

Costs Accounted For

The total costs identified and recorded for a specific period or project, including both direct and indirect expenses.

Costs Added

Refers to any additional expenses incurred during the production or acquisition of goods and services, typically encompassing materials, labor, and overhead costs that were not initially budgeted or anticipated.

Job-Order Costing

A cost accounting system that assigns costs to specific production batches or jobs, often used for custom orders.