Homework SourseYoshi Company completed the following transactions and event
Yoshi Company completed the following transactions and events involving its delivery trucks.
2016
2017
2018
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.
Calculate depreciation for year 2017.
0
Prepare journal entries to record these transactions and events.
| Jan. | 1 | Paid $25,015 cash plus $1,635 in sales tax for a new delivery truck estimated to have a five-year life and a $2,300 salvage value. Delivery truck costs are recorded in the Trucks account. | ||
| Dec. | 31 | Recorded annual straight-line depreciation on the truck. |
Solution
1-a. depreciation for year 2017
Total cost = $26,650
Less accumulated depreciation (from 2016) = 4870
[($26,650 - $2,300) / 5 years]
Book value = 21780
Less : revised salvage value = $2,700
Remaining cost to be depreciated =19080
Years of life remaining = 3
Total depreciation for 2017 [$19080 / 3] = $6360
Note:- Years of life remaining :
Total estimated useful life changed to 4 years = 4
less: One year used in 2017 = 1
Years of life remaining = 3
1-b Depreciation expense (for 2016) = 4870
Depreciation expense (for 2017) =$6360
Depreciation expense (for 2018) = $6360
Accumulated depreciation 12/31/2018 = $17590
Book value of truck at 12/31/2018
Total cost =$26,650
Less: Accumulated depreciation =$17590
Book value 12/31/2018 = $9060
less: sale of truck = $5,400
loss for sale of Truck on December, 2018 = $3660
1-c.
| Date | General Journal | Dr. | Cr. |
| 1 jan 2016 | delivery truck | $26,650 | |
| To cash | $26,650 | ||
| 31 Dec 2016 | Depreciation expense | 4870 | |
| To Accumulated depreciation | 4870 | ||
| 31 Dec 2017 | Depreciation expense | $6360 | |
| To Accumulated depreciation | $6360 | ||
| 31 Dec 2018 | Depreciation expense | $6360 | |
| To Accumulated depreciation | $6360 | ||
| 31 Dec 2018 | Cash | $5,400 | |
| Accumulated depreciation | $17590 | ||
| loss on sale of deliveryTrucks | $3660 | ||
| To delivery truck | 26,650 | ||
