Exact Time Logistics Co. purchased a delivery truck on Jan 02, 2020 for $145,000 and it was estimated that there will have a residual value of $ 15,000 at the end of its life time, which is 10 years. Exact Time Logistics Co depreciates its assets using straightline method. Due to slow down in the business, it sold this truck for $55,000 at the end of seventh year You are required to prepare a) depreciation schedule for the first seven years and b) determine the profit / loss on the sale and prepare the journal entry at the time of sale

Exact Time Logistics Co. purchased a delivery truck on Jan 02, 2020 for $145,000 and it was estimated that there will have a residual value of $ 15,000 at the end of its life time, which is 10 years. Exact Time Logistics Co depreciates its assets using straightline method. Due to slow down in the business, it sold this truck for $55,000 at the end of seventh year You are required to prepare a) depreciation schedule for the first seven years and b) determine the profit / loss on the sale and prepare the journal entry at the time of sale

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Description: Exact Time Logistics Co. purchased a delivery truck on Jan 02, 2020 for $145,000 and it wasestimated that there will have a residual value of $ 15,000 at the end of its life time, which is10 years. Exact Time Logistics Co depreciates its assets usin

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Exact Time Logistics Co. purchased a delivery truck on Jan 02, 2020 for $145,000 and it was
estimated that there will have a residual value of $ 15,000 at the end of its life time, which is
10 years. Exact Time Logistics Co depreciates its assets using straightline method.
Due to slow down in the business, it sold this truck for $55,000 at the end of seventh year
You are required to prepare
a) depreciation schedule for the first seven years and
b) determine the profit / loss on the sale and prepare the journal entry at the time of sale

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