Kaven Corporation purchased a truck at the beginning of 2016 for $75,000 which will be depreciated using the units-of-output method. The truck is estimated to have a residual value of $3,000 and a useful life of 4 years and 120,000 miles. It was driven 18,000 miles in 2016 and 32,000 miles in 2017. What is the depreciation expense for 2017?
A. $18,750
B. $19,200
C. $20,000
D. $32,000
Answer:B
Kaven Corporation purchased a truck at the beginning of 2016 for $75,000 which will be depreciated using the units-of-output method. The truck is estimated to have a residual value of $3,000 and a useful life of 4 years and 120,000 miles. It was driven 18,000 miles in 2016 and 32,000 miles in 2017. What is the depreciation expense for 2017?
A. $18,750 B. $19,200 C. $20,000 D. $32,000