Question

The Flintstone Construction Company delivers dirt and stone from local quarries to its construction sites. A new truck that was purchased for a cost of $118,000 at the beginning of the year was expected to deliver 118,000 tons over its useful life. The following is a breakdown of the tons delivered during the year to each construction Construction Sites: A B C D Tons Delivered: 1,800 3,300 3,800 1,300 How much truck depreciation should be allocated to Site A

Answer 1

Answer:

$1,800

Explanation:

Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.

It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset.

Total Depreciation = (1800 + 3300 + 3800 + 1300)/118000 * $118,000

= $10,200

The depreciation allocated to site A

= 1800/10200 * $10,200

= $1,800