1. Larkspur, Inc. purchased a tractor trailer for $154000. Larkspur uses the units-of-activity method for depreciating its trucks and expects to drive the truck 1000000 miles over its 12-year useful life. Salvage value is estimated to be $18000. If the truck is driven 64000 miles in its first year, how much depreciation expense should Larkspur record?

$11721.

$7957.

$9856.

$8704.

2. Equipment with a cost of $950000 has an estimated salvage value of $30000 and an estimated life of 4 years or 20000 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used for 5000 hours?

$237500.

$242500.

$230000.

$245000.