Question
Yoshi Company completed the following transactions and events involving its delivery trucks. Year 1 Jan.1Paid $23,515 cash plus $1,935 in sales tax for a
Yoshi Company completed the following transactions and events involving its delivery trucks.
Year 1
Jan. 1 Paid $23,515 cash plus $1,935 in sales tax for a new delivery truck estimated to have a five-year life and a $2,150 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 truck's 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 $5,600 cash.
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.
Depreciation expense (for Year 1) $4,660
Depreciation expense (for Year 2) 6,030
Depreciation expense (for Year 3) 6,030
Accumulated depreciation 12/31/Year 316,720
Book value of truck at 12/31/Year 3
Total cost $25,450
Accumulated depreciation (16,720)
Book value 12/31/Year 3 $8,730
Loss on sale of truck $2,790?
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