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Year 1 January 1 Paid $20,515 cash plus $1,485 in sales tax for...

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Accounting

Year 1

January 1 Paid $20,515 cash plus $1,485 in sales tax for a new delivery truck estimated to have a five-year life and a $2,000 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 $2,400. Recorded annual straight-line depreciation on the truck.

Year 3

December 31 Recorded annual straight-line depreciation on the truck.
December 31 Sold the truck for $5,300 cash.

Required:

1-a. Calculate depreciation for Year 2.

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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