5) 2016

Jan.		1		Paid $23,515 cash plus $1,485 in sales tax for a new delivery truck estimated to have a five-year life and a $2,000 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 trucks 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:

1-a. Calculate depreciation for year 2017. 1-b. Calculate book value and gain (loss) for sale of Truck on December, 2018. 1-c. Prepare journal entries to record these transactions and events.

a) Record the total cost of the new delivery truck

b) Record the year-end adjusting entry for the depreciation expense of the delivery truck.

c) Record the year-end adjusting entry for the depreciation expense of the delivery truck.

d) Record the year-end adjusting entry for the depreciation expense of the delivery truck.

e) Record the sale of the delivery truck for $5,500 cash.