Lasell Inc. acquired a truck on January 1, 2016, paying $11,000 for the truck, $500 for destination charges and $250 to paint the company logo on the side. Lasell estimates the truck to have a 5 year useful life and a residual value $1,750. The truck is expected to driven 100,000 miles in the 5 years. It is actually driven as follows: Straight-line (Cost - Residual Value) X (1/Useful Life) INCOME STATEMENT BALANCE SHEET Year 2016 2017 2018 2019 2020 Miles 15,000 25,000 30,000 25,000 5,000 Yearly Computation Depreciation Expense Year At acquisition Year 1 Year 2 Year 3 ($62,500 - $2500) X (1/3) amounts for $20,000 ($62,500 - $2500) X (1/3) adjusting entry 20.000 ($62,500 - $2500) X (1/3) each period 20.000 Total $60,000 Accumulated Book Cost - Depreciation = Value $62.500 $62.500 62,500 20,000 42.500 62.500 40,000 22500 62.500 60.000 2,500 1 1 used cost unused cost to-date to-date 1 On January 1, 2016, what amount should Lasell capitalize for the truck. 2 Complete the depreciation schedule based on straight line depreciation Income Statement Balance Sheet Net Book Value Dep. Expense Cost Accum. Dep. Year Computation At acquisition 1 2 3 4 5 3 Complete the depreciation schedule based on Units of production (Miles used) Income Statement Balance Sheet Net Book Value Dep. Expense Cost Accum. Dep. Year Computation At acquisition 1 2 3 4 5 3 Complete the depreciation schedule based on Double declining balance Income Statement Balance Sheet Net Book Value Dep. Expense Cost Accum. Dep. Year Computation At acquisition 1 2 3 4 5 4 On December 31, 2020, at the end of its useful life, the truck was sold for $3,000 cash. Compute the gain or loss on sale. The depreciation method is irrelevant we are using since it is at the end of its useful life. Assume that Lasell is using DDB and sells the truck at the end of year 2 for $3,000