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  3. 1. speedy delivery service recently hired a new ac

1. Speedy delivery service recently hired a new accountant who discovered that the prior accountant...

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Accounting

1. Speedy delivery service recently hired a new accountant who discovered that the prior accountant had erroneously capitalized on routine repair and maintenance costs on delivery trucks. The costs were added to the overall trucks book values and depreciated over time. How should Speedy have recorded routine maintenance and repair costs? What effect did the error have on Speedys balance sheet and income statement?

2.Speedy Delivery has a very lazy accountant. When originally setting up the delivery trucks into the accounting system, the accountant did not want to calculate the expected salvage value for each vehicle. He left salvage value at $0 even though this is not the case. Explain what leaving the salvage value at $0 would do for depreciation.

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