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Brainiac company purchased a delivery truck

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Reference no: EM131140539

Brainiac Company purchased a delivery truck for $30,000 on January 1, 2010.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 2010 and 12,000 in 2011.

Instructions

(a) Compute depreciation expense for 2010 and 2011 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.

(1) Prepare the journal entry to record 2010 depreciation.

(2) Show how the truck would be reported in the December 31, 2010, balance sheet. 

Reference no: EM131140539

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