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Tony and Suzie see the need for a rugged all-terrain vehicle totransport participants and supplies. They decide to purchase a usedSuburban on July 1, 2022, for $15,600. They expect to use theSuburban for five years and then sell the vehicle for $6,300. Thefollowing expenditures related to the vehicle were also made onJuly 1, 2022:
The company pays $2,700 to GEICO for a one-yearinsurance policy.
The company spends an extra $6,600 to repaint the vehicle,placing the Great Adventures logo on the front hood, back, and bothsides.
An additional $2,900 is spent on a deluxe roof rack and atrailer hitch.
The painting, roof rack, and hitch are all expected to increasethe future benefits of the vehicle for Great Adventures. Inaddition, on October 22, 2022, the company pays $2,200 for basicvehicle maintenance related to changing the oil, replacing thewindshield wipers, rotating the tires, and inserting a new airfilter.
Required:
1. Record the expenditures related to thevehicle on July 1, 2022. Note: The capitalized cost of the vehicleis recorded in the Equipment account. (If no entry isrequired for a transaction/event, select "No Journal EntryRequired" in the first account field.)
2. Prepare a depreciation schedule using thestraight-line method.
Years 2202-2027 Depreciation Expense Accumulated DepreciationBook Value
3. Record the depreciation expense and anyother adjustments related to the vehicle on December 31, 2022.(If no entry is required for a transaction/event, select"No Journal Entry Required" in the first accountfield.)

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4.2 Ratings (514 Votes)

Date	General Journal	Debit	Credit
July 1,2022	Equipment	12200
	Cash		12200
	(To expenditure made capitalized)

Book value as on July 1,2022 =$15,600 + $12,200 =$27,800



Straight Line
Date	Cost of asset	Depreciable cost	Depreciation rate	Depreciation expenses	Accumulated Depreciation	Book value
2022-6 months	$27,800	$21,500	10%	$2,150	$2,150	$25,650
2023	$27,800	$21,500	20%	$4,300	$6,450	$21,350
2024	$27,800	$21,500	20%	$4,300	$10,750	$17,050
2025	$27,800	$21,500	20%	$4,300	$15,050	$12,750
2026	$27,800	$21,500	20%	$4,300	$19,350	$8,450
2027-6 months	$27,800	$21,500	10%	$2,150	$21,500	$6,300


Date	General Journal	Debit	Credit
July 1,2022	Depreciation expenses-Equipment	$2,150
	Accumulated Depreciation-Equipment		$2,150

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Transcribed Image Text

In: AccountingItemSkippedeBookPrintReferencesCheck my workCheck My Work button is now enabled3Item 1Item...ItemSkippedeBookPrintReferencesCheck my workCheck My Work button is now enabled3Item 1Item 1 Part 1 of 3 10 points Item SkippedRequired information[The following information applies to the questionsdisplayed below.]Tony and Suzie see the need for a rugged all-terrain vehicle totransport participants and supplies. They decide to purchase a usedSuburban on July 1, 2022, for $15,600. They expect to use theSuburban for five years and then sell the vehicle for $6,300. Thefollowing expenditures related to the vehicle were also made onJuly 1, 2022:The company pays $2,700 to GEICO for a one-yearinsurance policy.The company spends an extra $6,600 to repaint the vehicle,placing the Great Adventures logo on the front hood, back, and bothsides.An additional $2,900 is spent on a deluxe roof rack and atrailer hitch.The painting, roof rack, and hitch are all expected to increasethe future benefits of the vehicle for Great Adventures. Inaddition, on October 22, 2022, the company pays $2,200 for basicvehicle maintenance related to changing the oil, replacing thewindshield wipers, rotating the tires, and inserting a new airfilter.Required:1. Record the expenditures related to thevehicle on July 1, 2022. Note: The capitalized cost of the vehicleis recorded in the Equipment account. (If no entry isrequired for a transaction/event, select "No Journal EntryRequired" in the first account field.)2. Prepare a depreciation schedule using thestraight-line method.Years 2202-2027 Depreciation Expense Accumulated DepreciationBook Value3. Record the depreciation expense and anyother adjustments related to the vehicle on December 31, 2022.(If no entry is required for a transaction/event, select"No Journal Entry Required" in the first accountfield.)