Paul Hauling has a fleet of 10 large trucks that cost a total of $1,410,000.The fleet is expected to provide 1,000,000 miles of transportation during an estimated 10-year life,and be sold for 10% of the original cost at the end of that time.If the fleet traveled 125,000 miles in the current twelve-month period,what would be the depreciation expense under the straight-line (SL)and units-of-production (UoP)methods?
A)SL = $158,625 & UoP = $141,000
B)SL = $141,000 & UoP = $158,625
C)SL = $126,900 & UoP = $176,250
D)SL = $126,900 & UoP = $158,625

Question

Quizplus · Accepted Answer

Straight line depreciation: Dep.Exp.per year = (Cost - residual value)* (1/useful life)
($1,410,000 - $141,000)* (1/10)= 126,900
Unit of Production: Dep Exp this period = (cost - residual value)* (actual prod this period/est total prod)(1,410,000 - 141,000)* (125,000/1,000,000)= $158,625.

Paul Hauling Has a Fleet of 10 Large Trucks That