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.

(1) Prepare the journal entry to record 2008 depreciation.

(2) Show how the truck would be reported in the December 31, 2008, balance sheet.