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Sams Subs purchased a delivery van on January 1, 2013, for $35,000. In addition, Sams paid sales tax and title

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Sam’s Subs purchased a delivery van on January 1, 2013, for $35,000. In addition, Sam’s paid sales tax and title fees of $1,500 for the van. The van is expected to have a four-year life and a salvage value of $6,500.


Required

a. Using the straight-line method, compute the depreciation expense for 2013 and 2014.

b. Prepare the general journal entry to record the 2013 depreciation.

c. Assume the van was sold on January 1, 2016, for $21,000. Prepare the journal entry for the sale of the van in 2016.


Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...

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Mugdha Sisodiya
My self Mugdha Sisodiya from Chhattisgarh India. I have completed my Bachelors degree in 2015 and My Master in Commerce degree in 2016. I am having expertise in Management, Cost and Finance Accounts. Further I have completed my Chartered Accountant and working as a Professional. Since 2012 I am providing home tutions.
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Fundamental financial accounting concepts

Fundamental financial accounting concepts

ISBN: 978-0078025365

8th edition

Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward

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Question Posted: October 26, 2013 07:00:16
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