Question
Greased Lightning, a delivery service, purchased a new delivery truck for $40,000 on January 1, 2022. The truck is expected to have an estimated useful
Greased Lightning, a delivery service, purchased a new delivery truck for $40,000 on January 1, 2022. The truck is expected to have an estimated useful life of 10 years or 148,000 miles and an expected residual value of $3,000. The truck was driven 15,000 miles in 2022 and 13,400 miles in 2023.
Required 1: Compute and provide in areas below the depreciation expense for 2022 and 2023 using the:
a. Straight-line method.
2022: 2023:
b. Double declining balance method.
2022: 2023:
c. Units-of-production method. (Do not round intermediate calculations. If required, round your final answers to the nearest whole dollar.)
2022: 2023:
2. Assume that Greased lightning sells the delivery truck on January 1, 2024 for $30,000 and was using the straight-line method of depreciation, present the journal entries required for this sale and indicate below the journal entry boxes if this sale resulted in a gain OR a loss of the company
Date Account Debit Credit
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2024. 1/1
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The disposal of the asset has resulted in a __________________ for the company.
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