Crestview estates purchased a tractor on january 1, 2015, for $65,000. the tractor's useful life is estimated to be 30,000 miles and has a residual value of $5,000. if crestview used the tractor 5,000 miles in 2015 and 3,000 miles in 2016, what is the balance for accumulated depreciation at the end of 2016 using the activity-based method?

$16,000

Explanation:

The computation of the accumulated depreciation is shown below:

For this computation, first we have to determine depreciation rate per mile which is presented below:

= (Original cost - residual value) ÷ (estimated miles)  

= ($65,000 - $5,000) ÷ ($30,000 miles)

= ($60,000) ÷ ($30,000 miles)  

= $2 per miles

Now the accumulated depreciation

= Total Production units  × depreciation per miles

= 8,000 miles × $2

= $16,000

The total production units would be

= 5,000 miles + 3,000 miles

= 8,000 miles

i think the answer to your question is b. directive

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough