Yoshi Company completed the following transactions and events involving its delivery trucks. ...
Question:
Yoshi Company completed the following transactions and events involving its delivery trucks.
2016:
Jan. 1: Paid $25,015 cash plus $1,935 in sales tax for a new delivery truck estimated to have a five-year life and a $2,300 salvage value. Delivery truck costs are recorded in the Trucks account.
Dec. 31: Recorded annual straight-line depreciation on the truck.
2017:
Dec. 31: Due to new information obtained earlier in the year, 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.
2018:
Dec. 31: Recorded annual straight-line depreciation on the truck.
Dec. 31: Sold the truck for $5,500 cash
Required:
a. Calculate depreciation for the year 2017.
b. Calculate book value and gain (loss) for sale of Truck in December 2018.
c. Prepare journal entries to record these transactions and events.
Depreciation:
Depreciation refers to an accounting approach which apportions a tangible non-current resource's acquisition cost over its life expectancy. It discloses the actual worth of a depreciable asset in a given period.
Answer and Explanation: 1
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View this answera) Computation of depreciation:
| Particulars | Amount ($) |
| Total Cost | $26,950 |
| Less: Accumulated dep. ($26,950-$2,300)/5 | $(4,930) |
| Book value | $22,02... |
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