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ony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purch...

ony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2022, for $12,000. They expect to use the Suburban for five years and then sell the vehicle for $4,500. The following expenditures related to the vehicle were also made on July 1, 2022: The company pays $1,800 to GEICO for a one-year insurance policy. The company spends an extra $3,000 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides. An additional $2,000 is spent on a deluxe roof rack and a trailer hitch. The painting, roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. In addition, on October 22, 2022, the company pays $400 for basic vehicle maintenance related to changing the oil, replacing the windshield wipers, rotating the tires, and inserting a new air filter.

4. Record the depreciation expense and any other adjustments related to the vehicle on December 31, 2022.

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Purchase price              12,000
Painting and new logo               3,000
Deluxe roof rack and trailer hitch               2,000
Total            17,000
Note: $1,800 paid to GEICO for a one-year insurance policy and
$400 for basic vehicle maintenance related to changing the oil,
replacing the windshield wipers, rotating the tires, and inserting
a new air filter should be capitalized.
Date General Journal Debit Credit
Dec 31, 2022 Depreciation Expenses               1,250
Accumulated Depreciation          1,250
[($17,000 - $4,500) x 1/5 x 1/2]
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