On July 1, 2020, Mollys Greenhouse purchased a new delivery truck for $65,000. She paid a $20,000 cash and signed a promissory note for the remainder. Molly estimates that the delivery truck will have a five-year useful life, or 200,000 kilometres and a residual value of $5,000. Mollys Greenhouse has a December 31 year end. Molly drove the truck 16,000 km in 2020; 45,000 km in 2021; 47,000 in 2022; 44,000 in 2023, and 49,000 in 2024.

(a)

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Prepare depreciation schedules for the life of the asset under the following depreciation methods:

1.		straight-line method
2.		double-diminishing-balance, and
3.		units-of-production method

(Round depreciable amount per unit to 2 decimal places, e.g. 5.27 and the final answers to 0 decimal places, e.g. 5,276.) 1. STRAIGHT-LINE METHOD

									End of Year
Year		Depreciable Amount		Depreciation Rate		=	Depreciation Expense		Accumulated Depreciation		Carrying Amount
Truck											$
2020		$			%		$		$
2021					%
2022					%
2023					%
2024					%
2025					%

2. DOUBLE-DIMINISHING-BALANCE METHOD

									End of Year
Year		Depreciable Amount		Depreciation Rate		=	Depreciation Expense		Accumulated Depreciation		Carrying Amount
Vehicles											$
2020		$			%		$		$
2021					%
2022					%
2023					%
2024					%
2025					%

3. UNITS-OF-PRODUCTION METHOD

								End of Year
Year		No. of Units		Depreciation Amt/Unit	=	Depreciation Expense		Accumulated Depreciation		Carrying Amount
Vehicles										$
2020				$		$		$
2021
2022
2023
2024

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Solution

List of Accounts

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(b)

Prepare journal entries to record the purchase of the asset on July 1, 2020, and to record depreciation expense on December 31, 2022 under the double diminishing balance method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit

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List of Accounts

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