**Calculate Book Value and Gain (or Loss) for Sale of Truck on December 31, Year 3**This exercise helps calculate the book value and potential gain or loss from the sale of a truck at the end of Year 3. The table consists of depreciation-related entries that are essential for determining the book value of the truck.1. **Depreciation expense (Year 1):** - Record the depreciation expense incurred in the first year.2. **Depreciation expense (Year 2):** - Record the depreciation expense incurred in the second year.3. **Depreciation expense (Year 3):** - Record the depreciation expense incurred in the third year.4. **Accumulated depreciation 12/31/Year 3:** - Calculate the total accumulated depreciation by summing up the depreciation expenses for Years 1, 2, and 3.5. **Book value of truck at 12/31/Year 3:** - Determine the book value by subtracting the accumulated depreciation from the total cost of the truck.6. **Total cost:** - Document the initial total purchase cost of the truck.7. **Accumulated depreciation:** - Reflect the up-to-date total depreciation up to December 31, Year 3.8. **Book value 12/31/Year 3:** - Present the final book value of the truck after accounting for all depreciation.The table is designed to have blank fields next to each entry, where users can input the necessary financial figures. This will help in computing the accurate book value and assess if there is any gain or loss from the sale of the truck. **Problem 8-5A: Computing and Revising Depreciation; Selling Plant Assets**Yoshi Company completed the following transactions and events involving its delivery trucks.**Year 1**- **Jan. 1:** Paid $20,515 cash plus $1,785 in sales tax for a new delivery truck estimated to have a five-year life and a $2,150 salvage value. Delivery truck costs are recorded in the Trucks account.- **Dec. 31:** Recorded annual straight-line depreciation on the truck.**Year 2**- **Dec. 31:** The truck's estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,700. Recorded annual straight-line depreciation on the truck.**Year 3**- **Dec. 31:** Recorded annual straight-line depreciation on the truck.- **Dec. 31:** Sold the truck for $5,600 cash.**Required:**1-a. Calculate depreciation for Year 2.1-b. Calculate book value and gain (loss) for sale of the truck on December 31, Year 3.1-c. Prepare journal entries to record these transactions and events.**Instruction:**Complete this question by entering your answers in the tabs below.

1. Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of the fixed assets. This is incurred on use, the passage of time, or effluxion. This is an expense booked on the income statement debit side of the organization. 2. Accumulated Depreciation - Accumulated Depreciation is the depreciation cumulative over the useful life of the fixed assets. It has a credit balance but it is recorded as contra assets. That is it reduces the value of fixed assets. It is recorded on the assets side of the balance sheet. 3. Ending Book Value - Ending book value is the net value of the assets recorded after deducting depreciation from the cost of the fixed assets. It is reflected on the assets side of the business.1. Journal Entries - 2. Book Value at Year 3 - 3. Solution -

Business

Accounting

Problem 8-5A Computing and revising depreclation; selling plant assets LO C2, P1, P2 Yoshi Company completed the following transactions and events involving its delivery trucks. Year 1 1 Paid $20, 515 cash plus $1,785 in sales tax for a new delivery truck estimated to have a five-year life and $2,150 salvage value. Delivery truck costs are recorded in the Trucks account. Jan. Dec. 31 Recorded annual straight-line depreciation on the truck. Year 2 Dec. 31 The truck's estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,700. Recorded annual straight-line depreciation on the truck. Year 3 Dec. 31 Recorded annual straight-line depreciation on the truck. Dec. 31 Sold the truck for $5,600 cash. Required: 1-a. Calculate depreciation 1-b. Calculate book value and gain (loss) for sale of Truck on December 31, Year 3. 1-c. Prepare journal entries to record these transactions and events. Year 2. Complete this question by entering your answers in the tabs below.

Problem 8-5A Computing and revising depreclation; selling plant assets LO C2, P1, P2 Yoshi Company completed the following transactions and events involving its delivery trucks. Year 1 1 Paid $20, 515 cash plus $1,785 in sales tax for a new delivery truck estimated to have a five-year life and $2,150 salvage value. Delivery truck costs are recorded in the Trucks account. Jan. Dec. 31 Recorded annual straight-line depreciation on the truck. Year 2 Dec. 31 The truck's estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,700. Recorded annual straight-line depreciation on the truck. Year 3 Dec. 31 Recorded annual straight-line depreciation on the truck. Dec. 31 Sold the truck for $5,600 cash. Required: 1-a. Calculate depreciation 1-b. Calculate book value and gain (loss) for sale of Truck on December 31, Year 3. 1-c. Prepare journal entries to record these transactions and events. Year 2. Complete this question by entering your answers in the tabs below.

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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