Problem 10-5A Computing and revising depreciation; selling plant assets LO C2, P
ID: 2483231 • Letter: P
Question
Problem 10-5A Computing and revising depreciation; selling plant assets LO C2, P1, P2 Yoshi Company completed the following transactions and events involving its delivery trucks. 2014 Jan. 1 Paid $22,015 cash plus $1,635 in sales tax for a new delivery truck estimated to have a five-year life and a $2,150 salvage value. Delivery truck costs are recorded in the Trucks account. Dec. 31 Recorded annual straight-line depreciation on the truck. 2015 Dec. 31 Due to new information obtained earlier in the year, the truck’s estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,700. Recorded annual straight-line depreciation on the truck. 2016 Dec. 31 Recorded annual straight-line depreciation on the truck. Dec. 31 Sold the truck for $5,400 cash. Required: Calculate depreciation for year 2015.
Required:
Calculate depreciation for year 2015.
total cost
less accumulated depreciation from 2014
book value
less revised salvage value
remaining cost to be depreciated
years of life remaining
total depreciation for 2015
Calculate book value and gain (loss) for sale of Truck on December, 2016.
Depreciation expense 2014
Depreciation expense 2015
Depreciation expense 2016
Accumulated Depreciation 12/31/16
Book value of truck at 12/31/2016
total cost
Accumulated Depreciation
book value 12/31/2016
Prepare journal entries to record these transactions and events.
Explanation / Answer
January 1, 2014: Journal entries:
Delivery Trucks.................................................23650
Cash..................................................................23650
December 31, 2014: Journal entry:
Depreciation expense.......................................4300
Accumulated depreciation-Delivery trucks...........4300
Straight line depreciation per year = (23650-2150)/5
December 31, 2015:
Depreciation for 2015-Calculation:
total cost 23650
less accumulated depreciation from 2014 4300
book value 19350
less revised salvage value 2700
remaining cost to be depreciated 16650
years of life remaining 3
total depreciation for 2015 5550
Journal entry for depreciatin for 2015:
Depreciation Expense.......................................5,550
Accumulated Depreciation--Delivery Truck 5,550
Book value and gain (loss) for sale of Truck on December, 2016:
Depreciation expense 2014 4300
Depreciation expense 2015 5550
Depreciation expense 2016 5550
Accumulated Depreciation 12/31/16 = 15400
Book value of truck at 12/31/2016:
total cost 23650
Accumulated Depreciation 15400
book value 12/31/2016 8250
Journal entires of December 31, 2016:
for depreciation:
Depreciation expense..............................5550
Accumulated depreciation-delivery truck............5550
for sale of the truck:
Cash..................................................5400
Accumulated depn-delivery truck 15400
Loss on sale of delivery truck............... 2850
Delivery truck...........................................................23650
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.