NeverLate Ltd. completed the following transactions involving delivery trucks: Mar. 26, 2020. Paid cash for a new
Question:
NeverLate Ltd. completed the following transactions involving delivery trucks:
Mar. 26, 2020. Paid cash for a new delivery truck, $105,325 plus $7,775 of freight costs. The truck was estimated to have a five-year life and a $10,000 trade-in value.
Dec. 31 Recorded straight-line depreciation on the truck to the nearest whole month.
Dec. 31, 2021. Recorded straight-line depreciation on the truck to the nearest whole month. However, due to new information obtained early in January, the original estimated useful life of the truck was changed from five years to four years, and the original estimated trade-in value was increased to $17,500.
Required:
Prepare journal entries to record the transactions.
Interpreting and Analyzing Financial Statements
ISBN: 978-0132746243
6th edition
Authors: Karen P. Schoenebeck, Mark P. Holtzman