Prepare the general journal entries to record

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Reference no: EM133434306

Exercise 8-11A (Algo) Events related to the acquisition, use, and disposal of a tangible plant asset: straight-line depreciation LO 8-2, 8-5

City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $24,100. In addition, City paid sales tax and title fees of $530 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,550.

Required

a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2.
b & c. Assume that the taxi was sold on January 1, Year 3, for $19,548. Prepare the general journal entries to record the Year 1 depreciation and sale of the taxi in Year 3.

Reference no: EM133434306

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