Consider the following independent situations. Situation 1: Sarasota Corporation purchased electrical equipment at a cost of $12,900 on June 2, 2017. From 2017 through 2020, the equipment was depreciated on a straight-line basis, under the assumption that it would have a 10-year useful life and a $2,100 residual value. After more experience and before recording 2021's depreciation, Sarasota revised its estimate of the machine's useful life downward from a total of 10 years to 8 years, and revised the estimated residual value to $2,100. On April 29, 2022, after recording part of a year's depreciation for 2022, the company traded in the equipment on a newer model, and received a $4,200 trade-in allowance, even though the equipment's fair value was only $2,900. The new asset had a list price of $15,900 and the supplier accepted $11,800 cash for the balance. The new equipment was depreciated on a straight- line basis, assuming a seven-year useful life and a $1,470 residual value. Determine the amount of depreciation expense reported by Sarasota for each fiscal year for the years ending December 31, 2017 to December 31, 2022. (Round depreciation expense per month to 0 decimal places, e.g. 15.and Round answers to decimal places, e.g. 5,275.) Year Depreciation expense 2017 $ 630 2018 $ 1080 2019 $ 1080 2020 $ 1080 2021 $ 2022 $ Situation 2: Bonita Limited acquired a truck to deliver and install its specialized products at the customer's site. The vehicle's list price was $47,000, but customization added another $10,000 in costs. Bonita took delivery of the truck on September 30, 2020, with a down payment of $5,000, signing a four-year, 8% note for the remainder, payable in equal payments of $15,076 beginning September 30, 2021. Bonita expected the truck to be usable for 500 deliveries and installations. After that, the product's technology would have changed and made the vehicle obsolete. In late July 2023, the truck was destroyed when a concrete garage collapsed. Bonita used the truck for 45 deliveries in 2020, 125 in 2021, 134 in 2022, and 79 in 2023. The company received a cheque for $12,500 from the insurance company and paid what remained on the note. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Prepare all entries that are needed to record the events and activities related to the truck, the note, and its interest, including the depreciation expense on the truck each year. Assume that Bonita uses an activity approach to depreciate the truck, and bases it on deliveries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round factor values to 5 decimal places, e.g. 5.27515 and final answers to 0 decimal places, e.g. 5,275. Round depreciation rate per delivery to O decimal places, e.g. 15.) 2020: Account Titles and Explanation Debit Credit Date September 30 December 31 (To record interest expense) December 31 (To record depreciation expense) 2021: Account Titles and Explanation Debit Credit Date September 30 December 31 (To record interest expense) December 31 (To record depreciation expense) 2022: Account Titles and Explanation Debit Credit Date September 30 December 31 (To record interest expense) December 31 (To record depreciation expense) 2023: Date Account Titles and Explanation Debit Credit July 31
