A delivery truck was purchased 4 years ago at a cost of P1,000,000. It had an estimated useful life of 10 years and estimated scrap value of P50,000. After 4 years, the old engine is replaced with a more powerful one at a cost of P220,000. The replacement did not change the estimated scrap value but extended the life of the delivery truck by 2 years. The old engine, whose allocated cost is P100,000 with no estimated scrap value is sold for P40,000. 20. Give the entry to record the sale of the old engine. 21. Give the entry to record the replacement. 22. Give the entry to record depreciation for the 5th year.
A delivery truck was purchased 4 years ago at a cost of P1,000,000. It had an estimated useful life of 10 years and estimated scrap value of P50,000. After 4 years, the old engine is replaced with a more powerful one at a cost of P220,000. The replacement did not change the estimated scrap value but extended the life of the delivery truck by 2 years. The old engine, whose allocated cost is P100,000 with no estimated scrap value is sold for P40,000. 20. Give the entry to record the sale of the old engine. 21. Give the entry to record the replacement. 22. Give the entry to record depreciation for the 5th year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A delivery truck was purchased 4 years ago at a cost of P1,000,000. It had an estimated useful life of
10 years and estimated scrap value of P50,000. After 4 years, the old engine is replaced with a more powerful
one at a cost of P220,000. The replacement did not change the estimated scrap value but extended the life of
the delivery truck by 2 years. The old engine, whose allocated cost is P100,000 with no estimated scrap value
is sold for P40,000.
20. Give the entry to record the sale of the old engine.
21. Give the entry to record the replacement.
22. Give the entry to record
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