Jokoy Company completed the following transactions and events involving its delivery trucks. Depreciation for the...
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Jokoy Company completed the following transactions and events involving its delivery trucks. Depreciation for the year is recorded at the end of year on Dec 31. Year 1
January 1 Paid $23,515 cash plus $1,785 in sales tax for a new delivery truck estimated to have a five-year life and a $2,450 salvage value. Delivery truck costs are recorded in the Trucks account. December 31 Recorded annual straight-line depreciation on the truck.
Year 2
December 31 The trucks 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. Assume change occured at beginning at Year 2 (Jan 1)
Year 3
December 31 Recorded annual straight-line depreciation on the truck. December 31 Sold the truck for $5,500 cash.
Required: 1-a. Calculate depreciation for Year 2 with changes in useful life and salvage value noted above 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.
Jokoy Company completed the following transactions and events involving its delivery trucks. Depreciation for the year is recorded at the end of year on Dec 31. Year 1
| January 1 | Paid $23,515 cash plus $1,785 in sales tax for a new delivery truck estimated to have a five-year life and a $2,450 salvage value. Delivery truck costs are recorded in the Trucks account. |
|---|---|
| December 31 | Recorded annual straight-line depreciation on the truck. |
Year 2
| December 31 | The trucks 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. Assume change occured at beginning at Year 2 (Jan 1) |
|---|
Year 3
| December 31 | Recorded annual straight-line depreciation on the truck. |
|---|---|
| December 31 | Sold the truck for $5,500 cash. |
Required: 1-a. Calculate depreciation for Year 2 with changes in useful life and salvage value noted above 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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