Question

Yoshi Company completed the following transactions and events involving its delivery trucks. 2016 Jan. 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. Dec. 31 Recorded annual straight-line depreciation on the truck. 2017 Dec. 31 Due to new information obtained earlier in the year, the truck's 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. 2018 Dec. 31 Recorded annual straight-line depreciation on the truck. Dec. 31 Sold the truck for $5,300 cash. Required: 1-a. Calculate depreciation for year 2017 1-b. Calculate book value and gain (loss) for sale of Truck on December, 2018. 1-c. Prepare journal entries to record these transactions and events. Complete this question by entering your answers in the tabs below.

Answer 1

total cost					22000
less Accumulated depreciation (2016)					4000
book value					18000
less revised salvage value					2,400
remaining cost to be depreciated					15,600
years of life remaining					3
total depreciation for 2017					5200
Depreciation expense (for 2016)					4000
Depreciation expense (for 2017)					5200
Depreciation expense (for 2018)					5200
Accumulated depreciation 12/31/2018)					14400
book value of truck at 12/31/2018)					7600
total cost					22000
Accumulated deprecciation					14,400
book value 12/31/2018					7600
loss on sale of truck (8730-5300)					2300
no	Date	General Journal				Debit	Credit
1	1/1/2016	Trucks				22,000
		cash					22,000
2	12/31/2016	Depreciation expense				4,000
		Accumulated depreciation					4000
3	12/31/2017	Depreciation expense				5,200
		Accumulated depreciation					5,200
4	12/31/2018	Depreciation expense				5,200
		Accumulated depreciation					5,200
5	12/31/2018	Cash				5,300
		Accumulated depreciation				14,400
		loss on sale of truck				2,300
		Truck					22,000