NBTel Company had a truck that was purchased on July
NBTel Company had a truck that was purchased on July 7, 2012, for $36,000. The PPE Subledger shows
the following information regarding the truck:

A customized tool carrier was constructed and permanently fitted to the truck on July 3, 2014, at a cost of $9,600 cash. The tool carrier adds to the economic value of the truck. It will be used for the truck’s remaining life and have a zero residual value. The useful life and residual value of the truck did not change as a result of the addition of the tool carrier.

1. Record the installation of the tool carrier assuming it is a component of the truck.
2. Calculate depreciation on the truck and its new component, the tool carrier, for the company’s December 31, 2014, and December 31, 2015, year-ends.
3. Calculate the book value of the truck at December 31, 2014 and2015.
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
Relevant Tutors available to help