Nova Scotia Telecom Company had a truck that was purchased on July 7, 2021, for $36,000. The

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Nova Scotia Telecom Company had a truck that was purchased on July 7, 2021, for $36,000. The PPE subledger shows the following information regarding the truck:


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A customized tool carrier was constructed and permanently fitted to the truck on July 3, 2023, 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.



Required1. 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, 2023, and December 31, 2024, year-ends.3. Calculate the book value of the truck at December 31, 2023 and 2024.

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Related Book For  book-img-for-question

Fundamental Accounting Principles Volume 2

ISBN: 9781260881332

17th Canadian Edition

Authors: Kermit D. Larson, Heidi Dieckmann, John Harris

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