Required information E8-4 (Algo) Determining Financial Statement Effects of an Asset Acquisition and Depreciation (Straight- Line Depreciation) LO8-2, 8-3 [The following information applies to the questions displayed below.) During Year 1, Ashkar Company ordered a machine on January 1 at an invoice price of $27,000. On the date of delivery, January 2, the company paid $9,000 on the machine, with the balance on credit at 12 percent interest due in six months. On January 3, it paid $1,500 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,400. On July 1, the company paid the balance due on the machine plus the interest. On December 31 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $4,500. E8-4 Part 5 5. What would be the net book value of the machine at the end of Year 2? (Amounts to be deducted should be indicated by a minus sign.) Net book value of machine at end of Year 2 Net book value at end of year 2 Cost of property and equipment (beginning of year) Cost of property and equipment (end of year) Capital expenditures during the year Accumulated depreciation (beginning of year) Accumulated depreciation (end of year) Depreciation expense during the year Cost of property and equipment sold during the year Accumulated depreciation on property sold Cash received on property sold Millions $ 41,465 43,480 2,985 21,840 23,015 1,988 970 813 131 Required: 1. Reconstruct the journal entry for the disposal of property and equipment during the year. 2. Compute the amount of property and equipment that United Parcel wrote off as impaired during the year, if any. (Hint: Set up T- accounts.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Reconstruct the journal entry for the disposal of property and equipment during the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 a 131 813 Cash Accumulated depreciation Loss on sale of property and equipment Property and equipment 26 970 E8-16 (Algo) Recording the Disposal of an Asset at Three Different Sale Prices LO8-5 Fast Delivery is the world's largest express transportation company. In addition to the world's largest fleet of all-cargo aircraft, the company has more than 658 aircraft and 69,000 vehicles and trailers that pick up and deliver packages. Assume that Fast Delivery sold a delivery truck that had been used in the business for three years. The records of the company reflected the following: Delivery truck cost Accumulated depreciation $ 48,000 33.000 Required: 1. Prepare the journal entry for the disposal of the truck, assuming that the truck sold for: (if no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. $15,000 cash b. $17,500 cash c. $12,800 cash View transaction list View joumal entry worksheet No Transaction General Journal Debit Credit 1 a. Cash Accumulated depreciation Delivery truck 15,000 33,000 48,000 2 b. 17,500 33,000 Cash Accumulated depreciation Gain on sale of long-lived asset Delivery truck 500 50,000 3 c. 12,800 33.000 Cash Accumulated depreciation Loss on sale of long-lived asset Delivery truck 200 45,000 E8-18 (Algo) Inferring Asset Age and Recording Accidental Loss on a Long-Lived Asset (Straight-Line Depreciation) LO8-3, 8-5 On January 1 of the current year, the records of Khouri Corporation showed the following regarding a truck: Equipment (estimated residual value, $9,500) Accumulated depreciation (straight-line, three years) $ 27,000 10,500 On December 31 of the current year, the delivery truck was a total loss as the result of an accident. Required: 1. Based on the data given, compute the estimated useful life of the truck. 2. Prepare all journal entries with respect to the truck on December 31 of the current year, assuming there was no insurance coverage on the truck. 3. Assuming Khouri had casualty insurance on the truck and received $8,900 from the insurance company for the accident, determine whether there was a gain or loss for the disposal and what the associated amount was. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Based on the data given, compute the estimated useful life of the truck. Estimated useful life 4 years View transaction list Journal entry worksheet On December 31 of the current year, the delivery truck was a total loss as the result of an accident. Required: 1. Based on the data given, compute the estimated useful life of the truck. 2. Prepare all journal entries with respect to the truck on December 31 of the current year, assuming there was no insurance coverage on the truck. 3. Assuming Khouri had casualty insurance on the truck and received $8,900 from the insurance company for the accident, determine whether there was a gain or loss for the disposal and what the associated amount was. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assuming Khouri had casualty insurance on the truck and received $8,900 from the insurance company for the accident, determine whether there was a gain or loss for the disposal and what the associated amount was. (If there is no gain or loss, select "NA" and do not input an amount.) Loss