Yoshi Company completed the following transactions and events involving its delivery trucks. 2016 Jan. 1 Paid $25,015 cash plus $1,935 in sales tax for a new delivery truck estimated to have a five-year life and a $2,300 salvage value. Delivery truck costs are recorded in the Trucks account. Dec. 31 Recorded annual straight-line depreciation on the truck. 2017 Dec. 31 Due to new information obtained earlier in the year, the truckâs 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. 2018 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 2017.
1-b. Calculate book value and gain (loss) for sale of Truck on December, 2018.
1-c. Prepare journal entries to record these transactions and events.
Yoshi Company completed the following transactions and events involving its delivery trucks. 2016 Jan. 1 Paid $25,015 cash plus $1,935 in sales tax for a new delivery truck estimated to have a five-year life and a $2,300 salvage value. Delivery truck costs are recorded in the Trucks account. Dec. 31 Recorded annual straight-line depreciation on the truck. 2017 Dec. 31 Due to new information obtained earlier in the year, the truckâs 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. 2018 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 2017.
1-b. Calculate book value and gain (loss) for sale of Truck on December, 2018.
1-c. Prepare journal entries to record these transactions and events.
Related questions
Accounting for Plant Assets
Stellar Delivery Service had the following transactions relatedto its delivery truck:
| Year 1 | |
| Mar. 1 | Purchased for $32,500 cash a new delivery truck with anestimated useful life of five years and a $6,850 salvage value. |
| Mar. 2 | Paid $600 for painting the company name and logo on thetruck. |
| Dec. 31 | Recorded depreciation on the truck for the year. |
| Year 2 | |
| July 1 | Installed air conditioning in the truck at a cost of $1,808cash. Although the truckâs estimated useful life was unaffected,its estimated salvage value was increased by $400. |
| Sept 7 | Paid $450 for truck tuneâup and safety inspection. |
| Dec. 31 | Recorded depreciation on the truck for the year. |
| Year 3 | |
| Sept 3 | Installed a set of front and rear bumper guards at a cost of$145 cash. |
| Dec. 31 | Recorded depreciation on the truck for the year. |
| Year 4 | |
| Dec. 31 | Recorded depreciation on the truck for the year. |
Stellarâs depreciation policies include (1) using straightâlinedepreciation, (2) recording depreciation to the nearest wholemonth, and (3) expensing all truck expenditures of $150 orless.
Required
Prepare journal entries to record these transactions andadjustments.
Round answers to the nearest whole number, when appropriate.
