On 1/1/2022 Silver Truck Inc. buys a truck for $23,000 cash. The truck is estimated to...
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On 1/1/2022 Silver Truck Inc. buys a truck for $23,000 cash. The truck is estimated to have a useful life of 4 years and a $7,000 salvage value at the end of the useful life. Depreciation is based on straight line method. The company sells the truck on 1/1/2024 for $17,000. a. Please use the balance sheet equation to record each of these transactions. Purchase of truck on 1/1/2022: A - Contra Asset = L + CC RE Depreciation on 12/31/2022: A - Contra Asset = L + CC RE Depreciation on 12/31/2023: A - Contra Asset = L + CC RE Sale of the truck on 1/1/2024: A - Contra Asset = L + CC RE b. Compared to the actual change in the market value of the truck, was the depreciation rate used by Silver Truck too high, too low or just right? (Answer in five or six sentences or less.) On 1/1/2022 Silver Truck Inc. buys a truck for $23,000 cash. The truck is estimated to have a useful life of 4 years and a $7,000 salvage value at the end of the useful life. Depreciation is based on straight line method. The company sells the truck on 1/1/2024 for $17,000. a. Please use the balance sheet equation to record each of these transactions. Purchase of truck on 1/1/2022: A - Contra Asset = L + CC RE Depreciation on 12/31/2022: A - Contra Asset = L + CC RE Depreciation on 12/31/2023: A - Contra Asset = L + CC RE Sale of the truck on 1/1/2024: A - Contra Asset = L + CC RE b. Compared to the actual change in the market value of the truck, was the depreciation rate used by Silver Truck too high, too low or just right? (Answer in five or six sentences or less.)
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Related Book For
College Accounting Chapters 1-30
ISBN: 978-1259631115
15th edition
Authors: John Price, M. David Haddock, Michael Farina
Posted Date:
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