Yoshi Company completed the following transactions and events involving its delivery trucks. 2017 Jan. 1 Paid $20,515
Question:
Yoshi Company completed the following transactions and events involving its delivery trucks.
2017
Jan. 1 Paid $20,515 cash plus $1,485 in sales tax for a new delivery truck estimated to have a five-year life and a $2,000 salvage value. Delivery truck costs are recorded in the Trucks account.
Dec. 31 Recorded annual straight-line depreciation on the truck.
2018
Dec. 31 Due to new information obtained earlier in the year, the truck’s estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,400. Recorded annual straight-line depreciation on the truck.
2019
Dec. 31 Recorded annual straight-line depreciation on the truck.
31 Sold the truck for $5,300 cash.
Required
Prepare journal entries to record these transactions and events.
Salvage ValueSalvage 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...
Step by Step Answer:
2017 Jan1 Trucks 22000 Cash 22000 Record cost of truck 20515 1485 Dec31 Depreciation Expense x Truck...View the full answer
Financial Accounting Information for Decisions
ISBN: 978-1259917042
9th edition
Authors: John J. Wild
