The Cheadle Company purchased a fleet of 20 delivery trucks for $8,000 each on January 2, 2007.

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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 Cheadle Company purchased a fleet of 20 delivery trucks


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

The Cheadle Company purchased a fleet of 20 delivery trucks


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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Related Book For  answer-question

Intermediate Accounting

ISBN: 978-0324300987

10th Edition

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

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