Your business operates on January 1 to December 31 calendar year basis. On April 1, 2020 you purchased a new delivery truck for your business. The truck was imported from India. The price of the truck is $50,000. Other costs related to truck are as follows: insurance during transporatation $2,000, painting and lettering your company logo $500, one year road insurance $1,000, sales taxes and fees $2,500, oil and lubricants for the truck $500, import taxes $5,000. The truck's estimated useful life is 5 years and you expect that the salvage value of the truck will be $1,000. Your task: a. Using the double declining method, prepare a full depreciation schedule for the truck. b. Assume that on December 31, 2023, you sell this truck for $12,000. Prepare a journal entry for this sale. C. Assume on December 31, 2022 the truck is destroyed in an accident and have to be disposed with no salvage. Prepare a journal entry for the disposal.
Your business operates on January 1 to December 31 calendar year basis. On April 1, 2020 you purchased a new delivery truck for your business. The truck was imported from India. The price of the truck is $50,000. Other costs related to truck are as follows: insurance during transporatation $2,000, painting and lettering your company logo $500, one year road insurance $1,000, sales taxes and fees $2,500, oil and lubricants for the truck $500, import taxes $5,000. The truck's estimated useful life is 5 years and you expect that the salvage value of the truck will be $1,000. Your task: a. Using the double declining method, prepare a full depreciation schedule for the truck. b. Assume that on December 31, 2023, you sell this truck for $12,000. Prepare a journal entry for this sale. C. Assume on December 31, 2022 the truck is destroyed in an accident and have to be disposed with no salvage. Prepare a journal entry for the disposal.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
i need asap answer
Transcribed Image Text:Your business operates on January 1 to December 31
calendar year basis.
On April 1, 2020 you purchased a new delivery truck for
your business. The truck was imported from India. The
price of the truck is $50,000.
Other costs related to truck are as follows: insurance
during transporatation $2,000, painting and lettering your
company logo $500, one year road insurance $1,000, sales
taxes and fees $2,500, oil and lubricants for the truck
$500, import taxes $5,000.
The truck's estimated useful life is 5 years and you expect
that the salvage value of the truck will be $1,000.
Your task:
a. Using the double declining method, prepare a full
depreciation schedule for the truck.
b. Assume that on December 31, 2023, you sell this truck
for $12,000. Prepare a journal entry for this sale.
C. Assume on December 31, 2022 the truck is destroyed in
an accident and have to be disposed with no salvage.
Prepare a journal entry for the disposal.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education