On January 1, 2023, Lands End Construction purchased a used truck for $52,500. A new motor had

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On January 1, 2023, Land’s End Construction purchased a used truck for $52,500. A new motor had to be installed to get the truck in good working order; the costs were $21,000 for the motor and $7,500 for the labour. The truck was also painted for $6,000. It was ready for use by January 4. A 12 month insurance policy costing $5,100 was purchased to cover the vehicle. The driver filled it with $225 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 $9,000. 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, 2023.

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Fundamental Accounting Principles Volume 2

ISBN: 9781260881332

17th Canadian Edition

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

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