On February 15, 2019, Genesis Transport purchased a $165,000 bus for tourist. Genesis plans on driving the truck for four years or 450,000 kilometres. Expected residual value for the truck is $35,000. Genesis drove the truck 90,000km in year 1, 86,000km in year 2, and 115,000km in year 3. Then, on June 30, 2022, after having driven the truck 44,000 kilometres in the year, the truck had an accident on the highway and was totalled. The insurance proceeds for the truck was $42,000 cash. Calculate the amortization expense for the truck for the year 2019 using the straight line method and record the journal entry. Calculate the amortization expense for the truck for the years 2019 and 2020 using the double-declining-balance method. Calculate the amortization expense for the truck for the year 2021 assuming the unit-of-production method is used.
On February 15, 2019, Genesis Transport purchased a $165,000 bus for tourist. Genesis plans on driving the truck for four years or 450,000 kilometres. Expected residual value for the truck is $35,000. Genesis drove the truck 90,000km in year 1, 86,000km in year 2, and 115,000km in year 3. Then, on June 30, 2022, after having driven the truck 44,000 kilometres in the year, the truck had an accident on the highway and was totalled. The insurance proceeds for the truck was $42,000 cash. Calculate the amortization expense for the truck for the year 2019 using the straight line method and record the journal entry. Calculate the amortization expense for the truck for the years 2019 and 2020 using the double-declining-balance method. Calculate the amortization expense for the truck for the year 2021 assuming the unit-of-production method is used.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On February 15, 2019, Genesis Transport purchased a $165,000 bus for tourist. Genesis plans
on driving the truck for four years or 450,000 kilometres. Expected residual value for the truck is $35,000.
Genesis drove the truck 90,000km in year 1, 86,000km in year 2, and 115,000km in year 3. Then, on June 30, 2022, after having driven the truck 44,000 kilometres in the year, the truck had an accident on the highway and was totalled. The insurance proceeds for the truck was $42,000 cash.
- Calculate the amortization expense for the truck for the year 2019 using the
straight line method and record thejournal entry . - Calculate the amortization expense for the truck for the years 2019 and 2020 using the double-declining-balance method.
- Calculate the amortization expense for the truck for the year 2021 assuming the
unit-of-production method is used.
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VIEWStep 5 2) Computation of amortization expense in the year 2019 and 2020 by Double declining method
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