At the end of the year SportsWorld completed an asset impairment test and noted that a piece of equipment with a book value of 12,000, has a recoverable value of $2,000.

12 points Prepare journal entries to record the following transactions of Salem Sales Co. during the current year: (6 marks) Mar. 1: Purchased a truck for $30,000 with a 5-year useful life and a $5,000 residual value. Salem also paid a 6% provincial sales tax, a $350 annual truck license, $500 to paint the truck with the company's colors and name, and $1,500 for spare parts. All payments were in cash. May 10: Purchased a garage from a neighboring business with a 10%, 4-year, $49,000 note. The seller's book value for the garage was $12,750 and the garage was appraised at $55,575. The estimated useful life is 10 years. Salem also paid a $2,940 real estate commission. June 1: Paid $350 cash to replace garage windows broken during a wind storm. Aug. 25: Purchased used office equipment for $11,000 plus provincial sales tax of $670, terms 2/10, 1/30 from Great West Office Supplies. As well, Salem paid freight costs of $100 and reconditioning costs of $900, which were paid in cash. Estimated useful life is 3 years and residual value is $500.- Sept. 5: Paid for the office equipment purchased on August 25. Oct. 5: Purchased store equipment for $24,500 plus $1,470 provincial sales tax. As well, Salem paid $550 for repairs incurred from an accident during installation, $3,200 for a special base for the equipment, and $2,600 for supplies to be used for regular preventive maintenance. Estimated useful life is 8 years and residual value is $1,200