The Martin Ready-Mix Company purchases a new 10-Yard delivery truck for $138,000. The following information is also available.

Sales Taxes 9,500

Transit Costs & Insurance 500 (to transport truck to Arizona)

Preparation Costs 1,000 (to ready truck of operation)

Fleet Liability Insurance 750 (covers all company trucks)

Painting & Lettering 500 (Company color scheme)

Weekly Drivers Wages 3,100 (for entire driver workforce)

Prep Team Wages 500 (Wages of team that preps truck)

The estimated life of the truck is 5 years (from 1/1/11), with a salvage value of $10,000. The truck was purchased for cash.

Calculate the cost of the truck that should be capitalized.

Summarize the entry to the accounting equation (by account title) to record the capitalization of the truck.

Assets = Liabilities + Equity

Using the straight-line depreciation method, calculate the depreciation that would be recorded for each year of the trucks life.

Assume that half way through the fourth year the truck is sold for $60,000. Make the appropriate entries (by account title) to record the sale of the truck.

Assets = Liabilities + Equity