The year-end is December 31 for all questions. Question 1 On January 1, 2018 a Silver Mining Corp purchased a large mining truck for $754,500. The manufacturer advertise that the trucks normally will last for 10 years. Sliver plans on using the truck for only 4 years, after which they will likely be sold for scrap $5,000. During the year, the following transactions also occurred: • January 1, 2018: Paid S15,000 to have the truck delivered to the mining site, • January 1, 2018: paid $9,000 in import duties. • January 1, 2018: Paid $1,500 to have company logo painted on side of the truck. • January 1, 2018: Paid $4,500 to have extra safety lights installed. • January 1, 2018: Paid $2,000 for repairs to the truck, and $10,000 in repairs to a building. The cause of the damage was driver error. (The driver confused reverse and forward) Required: Show all of the journal entries for 2018, including depreciation expense.
The year-end is December 31 for all questions. Question 1 On January 1, 2018 a Silver Mining Corp purchased a large mining truck for $754,500. The manufacturer advertise that the trucks normally will last for 10 years. Sliver plans on using the truck for only 4 years, after which they will likely be sold for scrap $5,000. During the year, the following transactions also occurred: • January 1, 2018: Paid S15,000 to have the truck delivered to the mining site, • January 1, 2018: paid $9,000 in import duties. • January 1, 2018: Paid $1,500 to have company logo painted on side of the truck. • January 1, 2018: Paid $4,500 to have extra safety lights installed. • January 1, 2018: Paid $2,000 for repairs to the truck, and $10,000 in repairs to a building. The cause of the damage was driver error. (The driver confused reverse and forward) Required: Show all of the journal entries for 2018, including depreciation expense.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:The year-end is December 31 for all questions.
Question 1
On January 1, 2018 a Silver Mining Corp purchased a large mining truck for $754,500. The
manufacturer advertise that the trucks normally will last for 10 years. Sliver plans on using the
truck for only 4 years, after which they will likely be sold for scrap $5,000.
During the year, the following transactions also occurred:
January 1, 2018: Paid S15,000 to have the truck delivered to the mining site,
• January 1, 2018: paid $9,000 in import duties.
• January 1, 2018: Paid S1,500 to have company logo painted on side of the truck.
• January 1, 2018: Paid $4,500 to have extra safety lights installed.
• January 1, 2018: Paid $2,000 for repairs to the truck, and S10,000 in repairs to a building.
The cause of the damage was driver error. (The driver confused reverse and forward)
Required: Show all of the journal entries for 2018, including depreciation expense.
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