On January 1, 2017, Lands End Construction purchased a used truck for $37,500. A new motor had
Question:
On January 1, 2017, Land’s End Construction purchased a used truck for $37,500. A new motor had to be installed to get the truck in good working order; the costs were $13,500 for the motor and $6,750 for the labour. The truck was also painted for $5,250. It was ready for use by January 4. A 12-month insurance policy costing $3,600 was purchased to cover the vehicle. The driver filled it with $180 of gas before taking it on its first trip. It is estimated that the truck has a five-year useful life and a residual value of $7,500. Land’s End uses the straight-line method to depreciate all of its vehicles. Prepare the entry to record the purchase of truck, insurance, and gas, and record the depreciation at year-end, December 31, 2017.
Step by Step Answer:
Fundamental Accounting Principles Volume 2
ISBN: 9781259087363
15th Canadian Edition
Authors: Kermit Larson, Heidi Dieckmann