Depreciation Handout Flextronics Corporation bought a truck on January 1, 2012 for $35,000, Management has estimated that equipment will have a useful life of five years or 120,000 miles. At the end of five years, management believes the truck will be worth $3,000. The actual mileage the truck was driven is as follows: 2012 2013 2014 2015 2016 50,000 miles 40,000 miles 20,000 miles 3,000 miles 9,000 miles Straight line Depreciation Cost - Residual Value (Depreciable Cost) Years Year Depreciation Expense Accumulated Depreciation Book Value 2012 2013 2014 2015 2016 Journal Entries Straight line 2012 2015 2013 2016 2014 Units of Production Step 1: Depreciation per Unit Cost-Residual Value Total Estimated Units of Activity Step 2: Depreciation Expense Depreciation per Unit X Units of Activity Year Units Rate Depreciation Expense Accumulated Book Value Depreciation 2012 2013 2014 2015 2016 Journal Entries Units of Production 2012 2013 2014 2015 2016 pouble Declining (accelerated method) 100% Years X 2 This method does NOT take into consideration the estimated residual value when calculating. Year Depreciation Expense Book Value Accumulated Depreciation 2012 2013 2014 2015 2016 Journal Entries 2012 2013 2014 2015 2016