Question

Please explain why the answer wrong

15 When originally purchased, a vehicle costing $23,940 had an estimated useful life of 8 years and an estimated salvage value o of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated f $2100. After 4 years salvage value. The depreciation expense in year 5 equals: $2730.00. lde preciakancossidual vene vsek $10,920.00. $2898.00. $5628.00. 23,940- 2l00/2 236725 volue Atter yey2 3,440 2368142 $5460.00.

Answer 1

Solution 15:

Book value of vehicle after 4 years = $23,940 - [($23,940 - $2,100)*4/8] = $13,020

Remaining useful life after 4 years = 2 years

Remaining cost to be depreciated = $13,020 - $2,100 = $10,920

Depreciation for 5th year = $10,920 / 2 = $5,460

Hence last option is correct.

Solution 1:

Bad debts expense to be recorded for the current year = $17,750 - $395 = $17,355

Adjusting Entry:

Bad debts expense Dr $17,355

Allowance for Doubtful Accounts Cr $17,355

Hence last option is correct.

Solution 5:

Cash paid on June 24 = ($11,700 - $2,160) * 98% + $1,350

= $10,699.20

Hence first option is correct.

Solution 6:

Total cost of merchandise = ($3,900 - $270) * 97% + $340 = $3,861.10

Hence 2nd option is correct.

Solution 5:

The entry shall include "A $1,400 Credit to paid in capital in excess of par value, common stock"

Hence 3rd option is correct.