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Exercise 4 In early January 2018, KzW GmbH purchased a delivery van at a cost of 54,000. Before placing it in service, the firm spent 2,000 painting it, 1,200 replacing tires, and 3,000 for a major overhaul of the engine. The van should remain in service for 8 years and have a residual value of vans annual mileage is expected to be 30,000 km in each of the first four years, and 20,000 km for 5,000. The each of the remaining years of useful life (240,000 km in total) Required: a) Journalize the purchase of the van. b) Prepare a depreciation schedule for the entire life of the asset using the double declining balance method. Journalize depreciation for the first year. c) The van is sold in January 2021 for 24,000. Journalize all the bookkeeping entries prepared by the firm from the date of purchase to the disposal date.
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