Calculate the depreciation expense and book value

Assignment Help Financial Accounting

Reference no: EM131286267

October 1, 2014, Pizza Pete buys a truck to deliver pizza for $40,000. The truck has a salvage value of $1,500 and useful life of 7 years.

Part A) Calculate the Depreciation expense and book value for 2014 and 2015 using straight line method.

Part B) (Additions) If Pizza Pete buys a tow hitch that cost $9,000 on January 1, 2016 to use tow illegally parked cars. The tow hitch does not extend the useful life of the truck. Using the information from Part A and using straight line depreciation method, calculate the 2016 depreciation expense and book value. (Omit some information)

Reference no: EM131286267

Questions Cloud

Regarding first-in-first-out process costing is true : Which of the following statements regarding first-in, first-out (FIFO) process costing is (are) true?

Job-order cost system-applies manufacturing overhead cost : The Smith Company uses a job-order cost system and applies manufacturing overhead cost to jobs on the basis of direct labour cost. At the beginning of the most recent year, the following estimates were made as a basis for computing the predetermined ..

Company should record the new heating system : A company bought new heating system for $130,000 and was given a trade-in of $87,000 on an old heating system, so the company paid $43,000 cash with the trade-in. The old system had an original cost of $120,000 and accumulated depreciation of $48,000..

Measures the decline in the market value of an asset : measures the decline in the market value of an asset. measures the physical deterioration of an asset. is the process of allocating the cost expiration of tangible property against income.

Calculate the depreciation expense and book value : October 1, 2014, Pizza Pete buys a truck to deliver pizza for $40,000. The truck has a salvage value of $1,500 and useful life of 7 years. Calculate the Depreciation expense and book value for 2014 and 2015 using straight line method.

About net operating cash flow : Which of the following is not true about net operating cash flow?

Relate to interest rate risk-premium bonds-discount bonds : Tarek Corporation bonds pay $100 in annual coupon, with a $1,000 par value. It will mature in a 5 years. The current bond yield in the market is 12 percent for the maturity of 5 years for Tarek. Calculate the value of the bond. Explain the implicatio..

Contrast the objectives of auditing : Contrast the objectives of auditing at the beginning of this century with the objectives of auditing today. Why do you think they are different? Where do you foresee the industry objectives to evolve in the next century?

About net operating cash flow : Which of the following is not true about net operating cash flow?

User Account

All Pages