Depreciation by Unitsofactivity Method A dieselpowered tract

Depreciation by Units-of-activity Method A diesel-powered tractor with a cost of $203,900 and estimated residual value of $2,600 is expected to have a useful operating life of 55,000 hours. During April, the tractor was operated 300 hours. Determine the depreciation for the month. If required, carry out any division to two decimal places.

Solution

Depreciation for the month = [($203,900 - $2,600) / 55,000] * 300

Depreciation for the month = $3.66 * 300

Depreciation for the month = $1,098