Brainiac Company purchased a delivery truck for R$30,000 on January 1, 2011. The truck has an expected residual value of R$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 2011 and 12,000 in 2012.

Instructions

(a) Compute depreciation expense for 2011 and 2012 using

(1) The straight-line method

(2) The units-of activity method,

(3) The double-declining balance method.

(b) Assume that Brainiac uses the straight-line method.

(1) Prepare the journal entry to record 2011 depreciation.

(2) Show how the truck would be reported in the December 31, 2011, statement of financial position.