On January 1, Jones Company acquired a new delivery truck for $40,000 cash. Additional cash payments during the year were as follows.
• Taxes and fees on delivery truck, $3,200
• Installation of GPS system and painting of logo for truck, $3,000
• Auto and liability insurance premiums paid on truck, $1,500.
a. Prepare all journal entries Jones would make regarding the delivery truck.
b. Assume that the delivery truck has an estimated useful life of five years and an estimated salvage value of $2,000. Calculate depreciation expense on the delivery truck for the current year, assuming Jones uses the double-declining-balance method of depreciation.
c. Show how Jones would report the truck on its current-year balance sheet.

  • CreatedJuly 16, 2015
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