Question 2

Kenny Company purchased a new truck on January 1, 2010, at a cost of $150,000. Over its 4-year useful life, the truck is expected to be driven 100,000 miles. Salvage value is expected to be $5,000. Actual mileage was: for year 2010, 25,000 miles; for year 2011, 33,000 miles; for year 2012, 26,000 miles; and for year 2013, 16,000 miles.

Required:

Prepare depreciation schedules for the following methods

a) Double Declining Balance Method using double the straight-line rate

b) Units-Of-Activity Method