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The following events took place at Tasty-Toppins Inc., a pizza shop that specializes in home delivery, during 2017: January 1, purchased a truck for $16,000
The following events took place at Tasty-Toppins Inc., a pizza shop that specializes in home delivery, during 2017:
- January 1, purchased a truck for $16,000 and added a cab and an oven at a cost of $10,900. The truck is expected to last five years and be sold for $300 at the end of that time. The company uses straight-line depreciation for its trucks.
- January 1, purchased equipment for $2,700 from a competitor who was retiring. The equipment is expected to last three years with zero salvage value. The company uses the double-declining-balance method to depreciate its equipment.
- April 1, sold a truck for $1,500. The truck had been purchased for $8,000 exactly five years earlier, had an expected salvage value of $1,000, and was depreciated over an eight-year life using the straight-line method.
- July 1, purchased a $14,000 patent for a unique baking process to produce a new product. The patent is valid for 15 more years; however, the company expects to produce and market the product for only four years. The patent's value at the end of the four years will be zero.
Required:
Determine the amount of depreciation or amortization recorded for each asset in the current year and the book value of each asset at the end of the year. For (c), indicate the accumulated depreciation and book value at the time of sale. Do not round intermediate calculations. If required, round your final answers to the nearest dollar. If an amount box does not require an entry, leave it blank or enter "0".
Asset | 2017 Depreciation/ Amortization | Ending/Time-of-Sale Book Value | Time-of-Sale Accumulated Depreciation |
a. Truck | $ | $ | |
b. Equipment | $ | $ | |
c. Truck | $ | $ | $ |
d. Patent | $ | $ |
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