Speedy Express is a family operation that has been operating in Victoria for

many years. It purchased a new delivery truck on January 1, 2017, at a cost of

$50,000. As Speedy delivers over a wide area, considerable mileage will be

recorded on the truck each year. Speedy currently uses the straight line method

but is considering using the double declining-balance method based at twice the

straight line rate. Speedy expects the life of the truck to be five years at the end

of which there will be a salvage value of $5,000. Speedy has a December 31st

year-end.

Required

(a) Prepare a depreciation schedule that shows the annual depreciation expense

and carrying value for the delivery truck for its 5-year life for both the straight line

and double-diminishing balance method.

(b) The truck was sold on July 1, 2019 for $10,000. Calculate the gain or loss

under the

double diminishing balance

method and record the journal entry for the

sale