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I need help with 3-5 Bill's Photos buys a truck on 4/1/2000 for the business. The cost is 150,000 and they expect to use it
I need help with 3-5
Bill's Photos buys a truck on 4/1/2000 for the business. The cost is 150,000 and they expect to use it for 6 years and expect a salvage value at that time of $6,000. Use straight line depreciation. PAY ATTENTION TO THE DATES 1. Describe the purchase of the truck with a journal entry: Account Debit Date 4/1/2000 Truck Credit $150,000.00 Cash $150,000.00 2. Describe the first MONTHS (one Month) depreciation with a journal entry 4/30/2000 Debit Credit Date Account 4/30/2000 Depreciation expense Accumulated depreciation 2000 2000 3. They decide to sell the truck on 10/31/2004. What is the net book value at this time? 4. The truck is sold for 12,000 cash on 10/31/2004. Describe this with a journal entry. Date Account Debit Credit Go back to the original assumptions. Assume they used miles driven as the method of depreciation. They believe it will be used 100,000 miles with the same 6,000 salvage value. 5. Describe the first months depreciation if they drive the truck 3,000 miles. Date Account Debit CreditStep by Step Solution
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