4.6 LO2/5 Tiger Trucks purchases a truck on 1 July 2015 for $90,000. The business decides that the truck ought to last for 5 years, after which it is likely to be sold for 10,000. Tiger Trucks’ accounting year is from January to December.

(a) Assuming straight-line depreciation, show the entries in the ledger accounts relating to the truck and depreciation for 2015 and 2016, clearly identifying the expense for each year, and the entries relating to vehicles that would provide the basis for the figures in the balance sheet for vehicles. Assets are to be shown at cost with associated accumulated depreciation.

(b) On 31 December 2017, the truck is sold for $40,000. Show the 2017 account entries.