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  3. on march 2, 1998, gourmet market purchased a deliv

On March 2, 1998, Gourmet Market purchased a delivery truck for $10,000. For financial statement...

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Accounting

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On March 2, 1998, Gourmet Market purchased a delivery truck for $10,000. For financial statement purposes, this asset was depreciated by the straight-line method, using an estimated useful life of 5 years and a residual value of $2,000. For income tax purposes, the truck was depreciated by the 150% declining balance method. On September 1, 2000, Gourmet Market sells the truck for $5,200 cash. a. Prepare a schedule showing side-by-side the annual amounts of depreciation expense that management will recognize in (1) the company's financial statements and (2) it's income tax returns. Continue this schedule until the asset is fully depreciated for both purposes. b. For financial statement purposes, compute the basis of this asset in the period of disposal and the amount of gain or loss on the sale. c. For income tax purposes, compute the basis of this asset in the period of disposal and the amount of gain or loss on the sale. d. Prepare journal entries to record in Gourmet Market's accounting records (1) depreciation of the truck for the year of disposal and (2) sale of the truck. Date both entries September 1, 2000

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