On 4/1/20, Kipper Company incurred these expenditures in purchasing a truck: cash price $48,000, accident insurance (during
Question:
On 4/1/20, Kipper Company incurred these expenditures in purchasing a truck: cash price $48,000, accident insurance (during use) $2,000, sales taxes $2,640,
motor vehicle license $300, and painting and lettering $1,350. Kipper expects to use the truck for five years (or 100,000 miles) and then dispose of it for $8,000.
Compute the depreciation expense for 2021 (second year) and the book value of the asset at 12/31/21 after adjustments, using each of the four GAAP depreciation methods that we covered in class. Assume that Kipper drove 6,000 miles in 2020 and 21,000 miles in 2021.
On 1/2/24 Kipper has an opportunity to sell the truck for $25,000, and decides to do so. Assuming that Kipper has used straight-line depreciation,
what journal entry will Kipper make to record the disposal?
Expert Answer:
Answer Computation of Depreciation Expenses Cost of Truck 48000 2000 2640 300 1350 Cost of Truck 542... View the full answer
