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.