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Accounting for Plant Assets Basin Corporation had the following transactions related to its delivery truck: Year 1 Jan. 5 Purchased for $16,400 cash a new

Accounting for Plant Assets

Basin Corporation had the following transactions related to its delivery truck:

Year 1
Jan. 5 Purchased for $16,400 cash a new truck with an estimated useful life of four years and a salvage value of $2,400.
Feb. 20 Installed a new set of side-view mirrors at a cost of $70 cash.
June 9 Paid $290 for an engine tune-up, wheel balancing, and a periodic chassis lubrication.
Aug. 2 Paid a $275 repair bill for the uninsured portion of damages to the truck caused by Basin's own driver.
Dec. 31 Recorded depreciation on the truck for the year.

Year 2
May 1 Installed a set of parts bins in the truck at a cost of $900 cash. This expenditure was not expected to increase the salvage value of the truck.
Dec. 31 Recorded depreciation on the truck for the year.

Year 3
Dec. 31 Recorded depreciation on the truck for the year.

Basins depreciation policies include (1) using straightline depreciation, (2) recording depreciation to the nearest whole month, and (3) expensing all truck expenditures of $75 or less.

Required Prepare journal entries to record these transactions and adjustments. Round all answers to the nearest dollar.

  • Year 1
  • Year 2
  • Year 3

General Journal
Date Description Debit Credit
YEAR 1
Jan. 5 AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
To record purchase of truck.
Feb. 20 AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
To record cost of installing side-view mirrors.
June 9 AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
To record cost of tune-up, wheel balancing and lubrication.
Aug. 2 AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
To record cost of repairing uninsured damages.
Dec. 31 AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
To record depreciation on delivery truck.

General Journal
Date Description Debit Credit
YEAR 2
May 1 AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
To record cost of installing part bins.
Dec. 31 AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
To record depreciation on delivery truck.

General Journal
Date Description Debit Credit
YEAR 3
Dec. 31 AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
AnswerAccumulated Depreciation - Delivery TruckCashDelivery TruckDepreciation Expense - Delivery TruckTruck Repairs & Maintenance Expense Answer Answer
To record depreciation on delivery truck.

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