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Yoshi Company completed the following transactions and events involving its delivery trucks. 2016 Jan. 1 Paid $23,515 cash pl
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Solution-a Depreciation for year2017:
This is a problem of change in estimate and if there is a change in estimate then it would be taken prospectively and not recorded for past diffrence
Depreciation for 2016:
Original Cost-Salvage Value)/Life of the Asset
Here:
Original Cost=($23515+$1785)=$25300
Salvage Value=$2150
Dep 2016=($25300-$2150)/5=$4630
Depreciation for 2017:
Book Value on Jan-2017=($25300-$4630)=$20670
Salvage Value=$2550
Life of the Asset=4 years
Remaining Life of the Asset=(4-1)=3 Years
Dep-2017=($20670-$2550)/3=6040$
Solution-b Dep 2016=($25300-$2150)/5=$4630
Dep-2017=($20670-$2550)/3=6040$
Depreciation for 2018=$6040(Due to SLM )
Book Value on Dec 2018:
($25300-$4630-$6040-$6040)=$8590
Sold For $5400
Los on Sale of Truck=($8590-$5400)=$3190
Solution-c Journal Entries Amount in $
Date Particular Amount(Dr) Amount(Cr)
1/1/2016 Truck A/c   Dr 25300
To Cash A/c 25300
Being Truck Purchased in Cash
31/12/2016 Depreciation A/c Dr 4630
To Accumulated Depreciation A/c 4630
Being Depreciation charged
31/12/2017 Depreciation A/c Dr 6040
To Accumulated Depreciation A/c 6040
Being Depreciation charged
31/12/2018 Depreciation A/c Dr 6040
To Accumulated Depreciation A/c 6040
Being Depreciation charged
31/12/2018 Cash A/c Dr 5400
Loss on Sale of Truck Dr 3190
Accumulated Depreciation A/c Dr 16710
To Truck A/c 25300
Being Truck Sold for$5400
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