Problem 10-5A (Algo) Computing and revising depreciation; selling plant assets LO C2, P1, P2 Yoshi Company completed
Question:
Problem 10-5A (Algo) Computing and revising depreciation; selling plant assets LO C2, P1, P2 Yoshi Company completed the following transactions and events involving its delivery trucks. Year 1 January 1 Paid $22,015 cash plus $1,635 in sales tax for a new delivery truck estimated to have a five-year life and a $2,300 salvage value. Delivery truck costs are recorded in the Trucks account. December 31 Recorded annual straight-line depreciation on the truck. Year 2 December 31 The trucks estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,700. Recorded annual straight-line depreciation on the truck. Year 3 December 31 Recorded annual straight-line depreciation on the truck. December 31 Sold the truck for $5,500 cash. Required: 1-a. Calculate depreciation for Year 2. 1-b. Calculate book value and gain (loss) for sale of Truck on December 31, Year 3. 1-c. Prepare journal entries to record these transactions and events.