Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mother Hips Garment Company purchased 2 trucks on Jan 1 2016 for $1,000,000 each, paying $20,000 cash and signing a 9%, 2-year note for

image text in transcribed

Mother Hips Garment Company purchased 2 trucks on Jan 1 2016 for $1,000,000 each, paying $20,000 cash and signing a 9%, 2-year note for the remaining balance. The double-declining balance method of depreciation is used to compute the truck's depreciation charges and their expected useful life is 10 years or 100,000 miles. 15,000 miles were driven, 18,500 in 2017, 15,600 in 2018, 17,000 in 2019, 14,500 in 2020, 10,800 in 2021 and 12,800 in 2022. The residual value on both truck is $209,715 each. On September 1, 2022, the company sold one of the trucks to Daley Company for $400,000 on credit. Round off answers to the nearest dollars. Instructions (a) Prepare the general journal entry to record the acquisition of trucks on Jan 1st. (b) Prepare necessary journal entries that reflect the sale of one of the trucks on September 1, 2022 (Depreciate the trust until 8/31, pay interest on the note payable, and sales) (c) Prepare any adjusting journal entries that should be made on December 31, 2022. (d) what is the gain or loss if the bus useful life is 5 years instead of 8 years in question (b) above?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Financial Accounting

Authors: Fred Phillips, Robert Libby, Patricia Libby

5th edition

78025915, 978-1259115400, 1259115402, 978-0078025914

More Books

Students also viewed these Accounting questions

Question

What are the two major forms of covert operations

Answered: 1 week ago