III. GROUP DEPRECIATION

COSTCO COMPANY PURCHASES 8 CARS FOR $30,000 EACH, AND THE AVERAGE EXPECTED SERVICE LIFE IS 4 YEARS WITH A RESIDUAL VALUE OF $4,000 EACH. OF THOSE CARS TWO ARE SOLD AFTER TWO YEARS FOR $10,000 EACH, FOUR AFTER THREE YEARS FOR $6,000 EACH AND THE REMAINING CARS FOR $3,000 EACH, AFTER FOUR YEAR.

A DETERMINE THE GROUP DEPRECIATION RATE

• DETERMINE THE GROUP DEPRECIATION EXPENSE FOR THE FIRST YEAR
• JOURNAL THE PURCHASES GROUP CARS ENTRY
• JOURNAL ENTRY FOR FIRST YEAR GROUP DEPRECIATION
• RECORD THE DISPOSAL OF TWO CARS
• RECORD THE DISPOSAL OF FOUR CARS
• RECORD THE DISPOSAL FOR REMAINING CARS