Question

Mercury Delivery Service completed the following transactions and events involving the purchase and operation of equipment for its business.
2012
Jan. 1 Paid $ 25,860 cash plus $ 1,810 in sales tax for a new delivery van that was estimated to have a five-year life and a $ 3,670 salvage value. Van costs are recorded in the Equipment account.
Jan. 3 Paid $ 1,850 to install sorting racks in the van for more accurate and quicker delivery of packages. This increases the estimated salvage value of the van by another $ 230.
Dec. 31 Recorded annual straight- line depreciation on the van.
2013
Jan. 1 Paid $ 2,064 to overhaul the van’s engine, which increased the van’s estimated useful life by two years.
May 10 Paid $ 800 to repair the van after the driver backed it into a loading dock.
Dec. 31 Record annual straight- line depreciation on the van. (Round to the nearest dollar.)

Required
Prepare journal entries to record these transactions and events.



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  • CreatedNovember 26, 2013
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