Answer:
Annual depreciation= $14,400
Explanation:
Giving the following information:
Purchasing price= $109,600.
The truck is estimated to have a salvage value of $4000.
Useful life of 132000 miles. It was driven 18000 miles in Year 7.
To calculate the depreciation expense, we need to use the units of the production method.
Annual depreciation= [(original cost - salvage value)/useful life of production in hours]*hours operated
In this case, miles driven:
Annual depreciation= [(109,600 - 4,000)/132,000]*18,000= $14,400
