Prior to Adjustment at the End of the Year,the Balance

question 104

Essay

Prior to adjustment at the end of the year,the balance in Trucks is $300,900 and the balance in Accumulated
Depreciation-Trucks is $88,200.Details of the subsidiary ledger are as follows:
$\begin{array}{|l|r|r|r|r|r|}\hline \begin{array}{l}\text { Truck } \\\text { No. }\end{array} & {\text { Cost }} & \begin{array}{l}\text { Estimated } \\\text { Residual Value }\end{array} & \begin{array}{l}\text { Estimated } \\\text { Useful Life }\end{array} & \begin{array}{l}\text { Accumulated } \\\text { Depreciation at } \\\text { Beginning of Year }\end{array} & \begin{array}{l}\text { Miles } \\\text { Operated } \\\text { During Year }\end{array} \\\hline 1 & \$ 100,000 & \$ 13,000 & 300,000 & - & 30,000 \\\hline 2 & 72,900 & 9,900 & 300,000 & \$ 60,000 & 25,000 \\\hline 3 & 38,000 & 3,000 & 200,000 & 8,050 & 45,000 \\\hline 4 & 90,000 & 13,000 & 200,000 & 20,150 & 40,000 \\\hline\end{array}$ Required:
1 Based on the units-of-output method,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.
2 Journalize the entry to record depreciation for the year.

---

Definitions:

Dissolve

To disperse or disappear into a solution, or in a corporate context, to legally terminate a company.

Domestic Corporation

A corporation that is registered and operates within its country of incorporation.

State of Incorporation

The specific state within a country where a corporation is registered to operate, abiding by its legal framework and benefiting from its corporate laws.

Franchisor

An entity that grants the right to operate a business under its trademark and brand name to another party, known as the franchisee.