E10-7 Assignment - (1) Prepare the journal entry to record...

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E10-7 Brainiac Company purchased a delivery truck for $30,000 on January 1, 2008. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2008 and 12,000 in 2009. Instructions (a) Compute depreciation expense for 2008 and 2009 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining balance method. (b) Assume that Brainiac uses the straight-line method.
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Unformatted text preview: (1) Prepare the journal entry to record 2008 depreciation. (2) Show how the truck would be reported in the December 31, 2008, balance sheet. Solution (a) 1) (2008- 3,500) (2009- 3,500) 2) (2008- 4,200) (2009- 3,360) 3) (2008- 6,000) (2009- 4,800) (b) 1) Dec.31 Depreciation Expense 3,500 Accumulated Depreciation-Delivery Truck 3,500 2) Brainiac Company Balance Sheet Property, plant, and equipment Delivery Truck 30,000 30,000 Less: Accumulated Depreciation 3,500 25,000...
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