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:

Uncertainty

A condition characterized by a lack of sufficient knowledge, making it difficult to precisely define the current situation, predict a future event, or identify multiple potential outcomes.

Certainty

The state or quality of being free from doubt or reservations; a condition of being sure about something.

Objectivity

The practice of basing judgments and decisions on observable phenomena and uninfluenced by emotions or personal biases.

Risk

Risk refers to the potential for loss or harm when engaging in an activity or making a decision, often quantified in terms of probability and impact.