Production or use depreciation. Assume that United Express purchased a new panel truck in May, Year 6. The truck cost $\$ 22,600$. United expected that it would drive the truck for 100,000 miles before trading the truck in and that the salvage value at that time would be $\$ 2,600$. Odometer readings were as follows:

On June 16, Year 9, the firm sold the truck for $\$ 2,600$.

a. Compute the depreciation charges for each year through Year 8, using a production or use method.

b. Record the entry on June 16, Year 9, to sell the truck.

Transcribed Image Text:

December 31, Year 6 December 31, Year 7 December 31, Year 8 June 16, Year 9 14,000 48,000 80,000 98,000