Yoshi Company completed the following transactions and events involving its deli

Question

Yoshi Company completed the following transactions and events involving its delivery trucks 2016 Jan. 1 Paid $23,515 cash plus $1,635 in sales tax for a nev delivery truck estimated to have a five-year life Dec. 31 Recorded annual straight-line depreciation on the truck. 2017 and a $2,000 salvage value. Delivery truck costs are recorded in the Trucks account. 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 vas inoreased to $2,700. Recorded annual straight- line depreciation on the truck. :06 2018 Dec. 31 Recorded annual straight-line depreciation on the truck. Dec 31 Sold the truck for $5,300 cash.

Explanation / Answer

Solution:

Computation of Annual depreciation, and gain / (loss) on sale of truck Particulars Amount Total Cost $25,150.00 Less: Depreciation for 2016 $4,630.00 Book Value $20,520.00 Less: Revised salvage value $2,700.00 Remaining cost to be depreciated $17,820.00 Years of remaining life 3 Total depreciation for 2017 $5,940.00 Depreciation Expense (2016) $4,630.00 Depreciation Expense (2017) $5,940.00 Depreciation Expense (2018) $5,940.00 Accumulated depreciation 31.12.2018 $16,510.00 Book value of truck at 31.12.2018 $8,640.00 Sale value of truck $5,300.00 gain (loss) on sale of truck -$3,340.00

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