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:

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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Truck: Component Date of Purchase Deprec. Method Jul. 7/2021 Truck body Motor Jul. 7/2021 SL SL Cost $28,000 8,000 $36,000 Est. Residual Est. Life 10 yr 10 yr -0- -0- Accum. Dep. at Dec. 31/2022 $4,200 1,200 $5,400