Please answer Q4
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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: Miles Year 2016 2017 2018 2019 2020 Straight-line (Cost - Residual Value) X (1/Useful Life) INCOME STATEMENT BALANCE SHEET 15,000 25,000 30,000 25.000 5,000 Yearly Computation Depreciation Expense Year At acquisition Year 1 Year 2 Year 3 1 On January 1, 2016, what amount should Lasell capitalize for the truck. $ 11,750 ($62,500 - $2500) X (1/3) amounts for $20,000 ($62,500 - $2500) X (1/3) adjusting entry 20,000 each period 20.000 ($62,500 - $2.500 (1/3) each period Total $60.000 Accumulated Book Cost - Depreciation = Value $62,500 $ 0 $ 62.500 62.500 20.000 42,500 62.500 40.000 22.500 62.500 60.000 2.500 1 1 used cost unused cost to-date to-date 2 Complete the depreciation schedule based on straight line depreciation Income Statement Dep. Expense $ $ Year Computation At acquisition 1 (11750-1750)/5 2 (11750-1750)/5 3 (11750-1750)/5 4 (11750-1750)/5 5 (11750-1750)/5 Balance Sheet Net Book Cost Accum. Dep. Value 11,750 $ $ 11,750 11,750 $ 2,000 $ 9,750 11,750 $ 4,000 $ 7,750 11,750 $ 6,000 $ 5,750 11,750 $ 8,000 $ 3,750 11,750 $ 10,000 $ 1,750 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ $ $ $ 3 Complete the depreciation schedule based on Units of production (Miles used) Income Statement Dep. Expense $ Year Computation At acquisition $ 1 (11750-1750)/100000*15000 $ 2 (11750-1750)/100000*25000 $ 3 (11750-1750)/100000*30000 $ 4 (11750-1750/100000*25000 $ 5 (11750-1750/100000*5000 $ 1,500 $ 2,500 $ 3,000 $ 2,500 $ 500 $ Balance Sheet Net Book Cost Accum. Dep. Value 11,750 $ - $ 11,750 11,750 $ 1,500 $ 10,250 11,750 $ 4,000 $ 7,750 11,750 $ 7,000 $ 4,750 11,750 $ 9,500 $ 2.250 11,750 $ 10,000 $ 1,750 3 Complete the depreciation schedule based on Double declining balance Income Statement Computation Dep. Expense Year At acquisition 1 $ $ 2 Balance Sheet Net Book Cost Accum. Dep. Value 11,750 $ $ 11,750 11,750 $ 4,700$ 7,050 11,750 $ 7,520 $ 4,230 11,750 $ 9,212 $ 2,538 11,750 $ 10,227$ 1,523 11,750 $ 10,836 $ 914 $ 11750*40/100 7050*40/100 4230*40/100 2538*40/100 1522.8*40/100 3 4,700$ 2,820$ 1,692 $ 1,015$ 609 $ $ 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
