A diesel-powered generator with a cost of $345,000 and estimated residual value of $18,000 is expected to have a useful operating life of 75,000 hours. During July, the generator was operated 1,250 hours. Determine the depreciation for the month using the units-of-production method.
Prior to adjustment at the end of the year, the balance in Trucks is $182,600 and the balance in Accumulated Depreciation-Trucks is $74,950. Details of the subsidiary ledger are as follows:
|
Truck
|
|
Estimated Residual
|
Estimated Useful
|
Accumulated Depreciation at
|
Miles Operated
|
|
No.
|
Cost
|
Value
|
Life
|
Beginning of Year
|
During Year
|
|
1
|
$68,000
|
$8,000
|
300,000 miles
|
$27,000
|
40,000 miles
|
|
2
|
48,600
|
6,600
|
200,000
|
39,900
|
12,000
|
|
3
|
38,000
|
3,000
|
200,000
|
8,050
|
36,000
|
|
4
|
28,000
|
4,000
|
120,000
|
-
|
21,000
|
a. Determine the depreciation rates per mile and the amount to be credited to the accumulated depreciation section of each of the subsidiary accounts for the miles operated during the current year.
b. Journalize the entry to record depreciation for the year.