Cullumber Company purchased a delivery truck for $48,000 on July 1, 2022. The truck has an expected salvage value of $10,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2022 and 12,000 in 2023. Cullumber uses the straight-line method of depreciation. Prepare the journal entry to record 2022 depreciation.

Cullumber Company depreciation for the year 2022 = $2,375

                                             Journal Entry for 2022

                                                                             Dr               Cr

                   Depreciation expenses                  $2,375

                   Accumulated Depreciation                              $2,375

Explanation:

annual depreciation on straight line =   Cost   - slavage value

                                                                              life span

                                                            = ( $48,000 - $10,000)/ 8

                                                           =    $38,000/8  =  $4,750

but the company purchase the asset on July 1 , therefore half year depreciation will be charged =  ( 6 * $4,750) / 12  = $2,375

answer; functional fixedness;