Question

Sunland Company purchased a delivery truck for $44,000 on July 1, 2022. The truck has an expected salvage value of $6,000, and is expected to be driven 100,000 miles aver its estimated useful life af 8 years. Actual miles driven were 15,000 in 2022 and 12,000 in 2023. Sunland uses the straight-line method af depreciation. Compute depreciation expense for 2022 and 2023. Depreciation Expense 2022 2023 Straight-line methods Prepare the journal entry to record 2022 depreciation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit Prepare the journal entry to record 2023 depreciation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts) Account Titles and Explanation Debit Credit Show how the truck would be reported in the December 31, 2023, balance sheet. SUNLAND COMPANY Partial Balance Sheet Click if you would like to show Work for this question: Osen Show Work

Answer 1

a) Depreciation expense

	2022	2023
Depreciation expense	(44000-6000/8)*6/12 = 2375	4750

b) Journal entry

Account title and explanation	Debit	Credit
Depreciation expense	2375
Accumulated depreciation-equipment		2375

c) Journal entry

Account title and explanation	Debit	Credit
Depreciation expense	4750
Accumulated depreciation-equipment		4750

d) Balance sheet presentation

equipment	44000
Less: Accumulated depreciation-equipment	-7125
	36875