Question
Yoshi Company completed the following transactions and events involving its delivery trucks. Year 1 Jan.1Paid $22,015 cash plus $1,785 in sales tax for a new
Yoshi Company completed the following transactions and events involving its delivery trucks.
Year 1
Jan.1Paid $22,015 cash plus $1,785 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.31Recorded annual straight-line depreciation on the truck.
Year 2
Dec.31The 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.31Recorded annual straight-line depreciation on the truck.Dec.31Sold the truck for $5,300 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.
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