Tanger Company purchased a delivery truck for $36,000 on January 1, 2014. The truck has an expected salvage value of $6,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2014 and 12,000 in 2015.

Instructions

(a) Compute depreciation expense for 2014 and 2015 using

(1) The straight-line method,

(2) The units-of-activity method,

(3) The double-declining-balance method.

(b) Assume that Tanger uses the straight-line method.

(1) Prepare the journal entry to record 2014 depreciation.

(2) Show how the truck would be reported in the December 31, 2014, balance sheet.