The T-Shirt Trends Company purchased a delivery truck on October 12, 2009, at a cost of $78,900.
Question:
The T-Shirt Trends Company purchased a delivery truck on October 12, 2009, at a cost of $78,900. The delivery truck has an estimated useful life of three years and an estimated disposal value of $900.
Instructions
On the forms provided in your working papers:
1. Prepare a depreciation schedule for the delivery truck using the straight-line method.
2. Record the following transactions on general journal page 41. Post the transactions to the ledger accounts provided.
3. Answer the following questions.
a. How did you determine the depreciation from October 12 to December 31?
b. What was the book value of the truck on December 31, 2009?
c. What was the book value of the truck on December 31, 2010?
d. How did you determine the annual depreciation on December 31, 2012?
Step by Step Answer:
Depreciation Schedule Year Depreciation Expense Book Value 2009 October 12Dec 31 7890031225 months 7...View the full answer
