Reference no: EM132615649
Question - In the recent years, Angelique Transporter has purchased two delivery trucks. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method of each delivery truck, and various methods have been used. Information concerning the delivery trucks is summarized in the table below.
|
Delivery Truck
|
Acquired
|
Cost
|
Salvage Value
|
Useful Life (in years)
|
Depreciation Method
|
|
A
|
July 1, 2015
|
$125,000
|
$10,000
|
10
|
Straight-line
|
|
B
|
January 1, 2015
|
$96,000
|
$6,000
|
5
|
Units-of-activity
|
For the delivery truck number B, the truck is expected to be driven 150,000 miles. Actual miles of use in the first 3 years were: 2015: 35,000, 2016: 32,000; 2017: 33,000.
Required - Answer for question below:
1. Prepare journal entries for purchasing those delivery trucks in cash.
2. Compute the amount of depreciation expense of each delivery truck per December 31, 2015.
3. Prepare journal entries for (2).
4. Suppose at 31 December 2015, Truck B is sold at $ 75,000 cash. Prepare the necessary journal.