Question
On April 1, 20X1, Axis Corporation acquired a delivery van for $60,000 cash. The van has a useful life of 6 years and a residual
On April 1, 20X1, Axis Corporation acquired a delivery van for $60,000 cash. The van has a useful life of 6 years and a residual value of $6,000. Calculate the depreciation expense for the year 20X1 using the straight-line method.
Additionally, Axis Corporation made the following transactions during 20X1:
- July 1: Paid $5,000 for vehicle insurance.
- September 1: Exchanged a portion of the van for office furniture with a fair value of $10,000. The portion exchanged had a carrying amount of $12,000.
Required:
- Calculate the total depreciation expense for the year 20X1.
- Prepare journal entries for the van-related transactions.
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Managerial Accounting The Cornerstone of Business Decision Making
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
7th edition
978-1337116008, 1337116009, 1337115770, 978-1337516150, 1337516155, 978-1337115773
