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In year one, Gator Co. acquired a truck that cost $75,500 with an estimated $14,000 salvage value and a 4 year estimated useful life. Depreciation
In year one, Gator Co. acquired a truck that cost $75,500 with an estimated $14,000 salvage value and a 4 year estimated useful life. Depreciation in the first year was $15,375. Gator Co. had the following transactions involving plant assets during year 2. Unless otherwise indicated, all transactions were paid for with cash.
1/5: Paid $5,000 to put a new engine in the truck that is expected to make the truck more efficient and increase the trucks useful life by one year. The salvage value did not change.
3/1: Paid $2,000 to replace a broken tailgate when a crate was inadvertently dropped on it.
12/31: Recorded straight-line depreciation on the truck.
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