Required: Record all the entries for the 2 years that Jessica owned the truck, including the disposal of the truck and oven.

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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Jessica Grewal decided to open a food truck business, the Samosa Shack. She encountered the following transactions in managing
her equipment over the first 2 years of her business.
April 1, 2021
October 1, 2021
December 31, 2021
April 1, 2022
December 31, 2022
March 31, 2023
Purchased food truck for $84,000 and paid $8,400 to have a commercial oven installed. Other costs
that she incurred are $8,400 for insurance on the truck for the first year, and $3,000 to have
the truck painted with her Samosa Shack logo. Jessica estimates that the truck would last 5 years
and have a $12,000 residual value. The oven is also expected to last 5 years and have a $600
residual value.
The oven broke down and cost $1,800 to repair.
Recorded the adjusting entry for depreciation and insurance.
Replaced all of the tires with all-season tires for $1,800 and paid another year of insurance for
$8,400.
Recorded the adjusting entry for depreciation and insurance.
Jessica was exhausted from the food truck business, and decided to go back to school and sell the
food truck to her friend Mark. He paid her $24,000 for the truck and oven, which included $900
for the oven component.
Note: The company calculates depreciation using the straight-line method to the nearest month.
Required:
Record all the entries for the 2 years that Jessica owned the truck, including the disposal of the truck and oven.
Transcribed Image Text:Jessica Grewal decided to open a food truck business, the Samosa Shack. She encountered the following transactions in managing her equipment over the first 2 years of her business. April 1, 2021 October 1, 2021 December 31, 2021 April 1, 2022 December 31, 2022 March 31, 2023 Purchased food truck for $84,000 and paid $8,400 to have a commercial oven installed. Other costs that she incurred are $8,400 for insurance on the truck for the first year, and $3,000 to have the truck painted with her Samosa Shack logo. Jessica estimates that the truck would last 5 years and have a $12,000 residual value. The oven is also expected to last 5 years and have a $600 residual value. The oven broke down and cost $1,800 to repair. Recorded the adjusting entry for depreciation and insurance. Replaced all of the tires with all-season tires for $1,800 and paid another year of insurance for $8,400. Recorded the adjusting entry for depreciation and insurance. Jessica was exhausted from the food truck business, and decided to go back to school and sell the food truck to her friend Mark. He paid her $24,000 for the truck and oven, which included $900 for the oven component. Note: The company calculates depreciation using the straight-line method to the nearest month. Required: Record all the entries for the 2 years that Jessica owned the truck, including the disposal of the truck and oven.
Required:
Record all the entries for the 2 years that Jessica owned the truck, including the disposal of the truck and oven.
View transaction list
Journal entry worksheet
<
1
2
3
Note: Enter debits before credits.
Date
April 01, 2021
Record entry
4
Record purchase of food truck, oven and insurance.
5
6
General Journal
Clear entry
7
8
Debit
12
Credit
View general journal
Transcribed Image Text:Required: Record all the entries for the 2 years that Jessica owned the truck, including the disposal of the truck and oven. View transaction list Journal entry worksheet < 1 2 3 Note: Enter debits before credits. Date April 01, 2021 Record entry 4 Record purchase of food truck, oven and insurance. 5 6 General Journal Clear entry 7 8 Debit 12 Credit View general journal
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