Answer the ten (10) questions given the following data set:

ABC Company completed the following transactions and events involving its delivery trucks.

January 1 Year 1, ABC Company 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.

December 31 Year 2, the trucks estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,400.

July 1 Year 3, ABC Company sold the truck.

For Question 1-9, assume that ABC uses the straight line method of depreciation.

For Finiancial Accounting

Question 1

What is the Year 1 Depreciation Expense?

Question 2

What is the impact on the net income in Year 1 when depreciation expense for Year 1 was recorded?

Question 3

What is the Year 2 depreciation expense?

Question 4

What is the impact on the cash flow in Year 2 when depreciation expense for Year 2 was recorded?

Question 5

What is the Net Book Value of the truck on December 31 Year 2?

Question 6

What is the balance of Accumulated Depreciation of truck on July 1 Year 3?

Question 7

What is the Net Book Value of the truck on June 30 Year 3?

Question 8

If the truck was sold for $5,300 cash, calculate gain (loss) for sale of Truck on July 1 Year 3.

Question 9

If the truck was sold for $11,000 cash, calculate gain (loss) for sale of Truck on July 1 Year 3.

Question 10

If ABC had used Double-declining-balance (DDB) method of depreciation, what would the depreciation expense have been for Year 1?