Basic Bookkeeping$-$Level $2$

Congratulations! You are now finished Part $1$ of the Final Exam. Please make sure you have answered all the Practical Exam questions. Once you have completed the Practical Exam, let your Learning Coach know.

You are now ready to begin Part $2$ of the Final Exam. Your Learning Coach will provide you with access to the Online Exam, where you will select answers from a series of questions based on information in your Student Workbook, as well as information entered on your Practical Exam Answer Sheets.Instructions: Use the tables, statements, etc. in this section for all your entries.

Capital Assets Answer the following independent situations in the space provided. Part A The Rourke Group bought a tractor on January $1,2005$ for $$65,000.$ They use the declining balance depreciation method with a $30\%$ rate. Calculate the depreciation for the years ended December $31,2005$ and December $31,2006.$

Depreciation Expense: December $31,2005$

Depreciation Expense: December $31,2006$

Part B

Jacob Manufacturing purchased a new

truck on April $1,2005$ for $$30,000.$ The truck is expected to have a residual value of $$2,000$ and its useful life is anticipated to be seven years. The company uses the straight$-$line method of depreciation. Jacob Manufacturing has a December $31$st year$-$end.

Calculate the depreciation expense for the first year $($December $31,2005).$

Prepare the journal entry to record depreciation expense for the first year $($Ignore account numbers.$)$ dr cr

Calculate the depreciation expense for the second year $($December $31,2006).$

Calculate the net book value at December $31,2006.$

Calculate the gain or loss on the sale assuming the truck was sold on December $31,2006$ for $$23,500.$

Prepare the journal entry to record the sale of the truck on December $31,2006$ for $$23,500.$ Dr cr dr cr

Academy of LEARNING

Exam$-6$

BBK$99$E$2/0905$