Renner Corporation purchased a delivery van for $28,500 in 2013. The firm’s financial condition immediately prior to the purchase is shown in the following horizontal statements model:

The van was expected to have a useful life of 200,000 miles and a salvage value of $2,500.
Actual mileage was as follows:
2013 ......... 60,000
2014 ......... 50,000
2015 ......... 55,000

a. Compute the depreciation for each of the three years, assuming the use of units-of-production depreciation.
b. Assume that Renner earns $26,000 of cash revenue during 2013. Record the purchase of the van and the recognition of the revenue and the depreciation expense for the first year in a financial statements model like the one shown above.
c. Assume that Renner sold the van at the end of the third year for $8,000. Record the general journal entry for thesale.

  • CreatedOctober 26, 2013
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