XYZ Corporation purchased a delivery van for $30,000 on January 1, 2022. The van has an estimated
Question:
XYZ Corporation purchased a delivery van for $30,000 on January 1, 2022. The van has an estimated useful life of 5 years and an estimated residual value of $3,000. The company uses the straight-line method of depreciation. On December 31, 2022, the company determined that the van had a remaining useful life of 4 years and a revised residual value of $2,000. The company uses a periodic inventory system, and the van is used to deliver inventory to customers. During 2022, the company made 10,000 deliveries, with an average delivery size of $100. Calculate the cost of goods sold for 2022, including the impact of the change in estimated useful life and residual value, and explain how the change in depreciation and cost of goods sold will impact the company's financial statements.
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield