The Cheadle Company purchased a fleet of 20 delivery trucks for $8,000 each on January 2, 2007. It decided to use composite depreciation on a straight-line basis, and calculated the depreciation from the following schedule:

The company actually retired the trucks according to the following schedule (assume each truck was retired at the beginning of the year):

Required
1. Prepare the journal entries necessary to record the preceding events.
2. Assume that the company expected all the trucks to last four years and be retired for $1,600 each. Using group depreciation, prepare journal entries for all six years, assuming the company retired the trucks as shown by the latter schedule.

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Number of Trucks to Be Retired at Year-End Year 2008 2009 2010 2011 Estimated Residual Value per Truck $4,000 4,000 2,000 6 Number of Trucks Retired Year 2008 2009 2010 2011 2012 2013 Total Proceeds from Retirements $4,000 11,000 19,000 6,000 4,000 1,000 3 3 2