On January 1, 2015, a Company Acquired a Truck for $600,000

question 109

Essay

On January 1, 2015, a company acquired a truck for $600,000. Residual value was estimated to be $20,000. The truck can be driven for 50,000 miles over the next 3 years. Actual usage of the truck recorded as: 8,640 miles for the first year. Give journal entry to record depreciation for the first year calculated as per the units-of-production method. (Do not round your intermediate calculations).

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Definitions:

Capital Stock

The total amount of a company's shares of stock, representing ownership in the company.

Records Expense

The act of documenting or entering an expense into the accounting system to reflect its impact on the financial statements.

Obligation

A formal commitment or requirement to do something, often financial in nature, such as repaying a loan or fulfilling a contractual agreement.

Chart Of Accounts

A listing of all the accounts in the general ledger, each with a unique account number.