Question
I have done 1st and 2nd part but I stuck in 3 part can you please help me out Thanks Exhibit A - MBA Transportation
I have done 1st and 2nd part but I stuck in 3 part can you please help me out
Thanks
Exhibit A - MBA Transportation (MBA T)
On July 1, 2014, MBA T bought a truck for $52,000 cash. It has estimated residual value of $4,000, and an estimated life of 4 years, or 400,000 kilometers. The truck drove 99,000 kilometers in 2014, 91,000 kilometers in 2015, 120,000 kilometers in 2016, and 95,000 kilometers in 2017. MBA T. has a December 31st year end.
Part 1) Refer to Exhibit A, prepare the journal entry to record the depreciation expense in 2014 to 2017 if MBA T uses the units-of-production method to determine depreciation.
Part 2) Refer to Exhibit A, prepare the journal entry to record the depreciation expense in 2016 and 2017 and sales of the truck if MBA T uses the double-declining balance method to determine depreciation and sold the truck on April 30th 2017 for;
a.Sold the truck for $5,531 cash
b.Sold the truck for $10,000 cash
c.Sold the truck for $6,000on account.
Part 3) Refer to the Exhibit A and the following information:
1.MBA T uses straight-line method of depreciation,
2.On May 1, 2015 a new canopy was installed onto the truck at a cost of $5,000,
3.The useful life was changed from four years to six years after installation of the new canopy, and
4.The estimated residual value was changed from $4,000 to $6,000
Prepare the following journal entries:
1.Prepare the journal entry to record the expenditure on the canopy for cash on May 1st 2015.
2.Prepare the journal entry to record the depreciation expense for year 2015.
3.Close the depreciation expense account on December 31, 2015.
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