XYZ Company completed the following transactions and events involving its delivery trucks. Year 1

Jan.		1		Paid $20,515 cash plus $1,635 in sales tax for a new delivery truck estimated to have a five-year life and a $2,450 salvage value. Delivery truck costs are recorded in the Trucks account.
Dec.		31		Recorded annual straight-line depreciation on the truck.

Year 2

Dec.

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

Dec.		31		Recorded annual straight-line depreciation on the truck.
Dec.		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.

1A. Calculate depreciation for year 2.

Total cost
Less accumulated depreciation from year 1
book value
less revised salvage value
remaining cost to be depreciated
years of life remaining
total depreciation for year 2

1B. Calculate book value and gain (loss) for sale of truck on Dec. 31, year 3.

Depreciation expense for year 1
Depreciation expense for year 2
Depreciation expense for year 3
Accumulated depreciation 12/31/year 3
Book value of truck at 122/31/year 3
total cost
accumulated depreciation
book value 12/31/year 3
gain or loss on sale of truck

1C. Prepare journal entries to record these transactions and events.

Record the total cost of the new delivery truck, year-end adjusting entry for the depreciation expense of the delivery truck, year-end adjusting entry for the depreciation expense of the delivery truck, year-end adjusting entry for the depreciation expense of the delivery truck, and record the sale of the delivery truck for $5,500 cash.

Date	General Journal	Debit	Credit
Jan 01, yr 1
dec 31, yr 1
dec 31, yr 2
dec 31, yr 3
dec 31, yr 3