Friendly Corporation purchased a delivery van for $28,500 in 2016. The firms financial condition immediately prior to

Question:

Friendly Corporation purchased a delivery van for $28,500 in 2016. The firm€™s financial condition immediately prior to the purchase is shown in the following horizontal statements model:

The van was expected to have a useful life of 200,000 miles and a salvage value of $2,500.
Actual mileage was as follows:
2016 60,000
2017 50,000
2018 55,000
Required
a. Compute the depreciation for each of the three years, assuming the use of units-of-production depreciation.
b. Assume that Friendly earns $26,000 of cash revenue during 2016. Record the purchase of the van and the recognition of the revenue and the depreciation expense for the first year in a financial statements model like the one shown above.
c. Assume that Friendly sold the van at the end of the third year for $8,000. Record the general journal entry for the sale.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... 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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...