Problem
Linton Company purchased a delivery truck for $34,000 on January 1, 2015. 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 2015 and 12,000 in 2016.
A. Compute depreciation expense for 2015 and 2016 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining-balance method.
B. Assume that Linton uses the straight-line method. Prepare the journal entry to record 2015 depreciation. Show how the truck would be reported in the December 31, 2015, balance sheet.