A truck was acquired on July 1, 2014, at a cost of $216,000 The truck had a six year useful life and an estimated salvage value of $24,000 The straight line method of depreciation was used On January 1, 2017, the truck was overhauled at a cost of $20,000, which extended the useful life of the truck...

Cost 216000 Less salvage value 24000 Depreciable base July 1 2014 192000 Less dep ...

A truck was acquired on July 1, 2014, at a cost of $216,000. The truck had a

Question:

A truck was acquired on July 1, 2014, at a cost of $216,000. The truck had a six-year useful life and an estimated of $24,000. The straight-line method of depreciation was used. On January 1, 2017, the truck was overhauled at a cost of $20,000, which extended the useful life of the truck for an additional two years beyond that originally estimated ( is still estimated at $24,000). In computing depreciation for annual adjustment purposes, expense is calculated for each month the asset is owned.
Instructions
Prepare the appropriate entries for January 1, 2017 and December 31, 2017.
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...