Question
On February 1, 20X1, Beta Corporation purchased a delivery truck for $50,000 cash. The truck has an estimated useful life of 5 years and a
On February 1, 20X1, Beta Corporation purchased a delivery truck for $50,000 cash. The truck has an estimated useful life of 5 years and a residual value of $5,000. Using the straight-line method, calculate the depreciation expense for the year 20X1.
Additionally, Beta Corporation made the following transactions during 20X1:
- March 15: Beta Corporation spent $3,000 on repairs and maintenance for the truck.
- May 1: Beta Corporation purchased insurance coverage for the truck for $1,500 for the year.
- August 1: Beta Corporation installed a GPS tracking system on the truck for $2,500 to improve efficiency.
Furthermore, Beta Corporation provided the following information regarding its financial statements for the year 20X1:
| Date | Description | Amount |
|---|---|---|
| February 1 | Truck purchase | $50,000 |
| March 15 | Repairs and maintenance | $3,000 |
| May 1 | Insurance coverage | $1,500 |
| August 1 | GPS tracking system installation | $2,500 |
Required:
- Calculate the total depreciation expense for the year 20X1 for the delivery truck.
- Prepare the journal entries to record the truck-related transactions for Beta Corporation during the year 20X1.
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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
7th Canadian edition
1119368456, 978-1119211587, 1119211581, 978-1119320623, 978-1119368458
