uerdse 8-9A Events related to the acquisition, use, and disposal of a tangible p
ID: 2551701 • Letter: U
Question
uerdse 8-9A Events related to the acquisition, use, and disposal of a tangible plant kecasset: straight-line depreciation LO 8-2, 8-5 Taxi Service purchased a new auto to use as a taxi on January 1, 2016, for $36,000. In addi- City City paid sales tax and title fees of S1.200 for the vehicle. The taxi is expected to have a tion, Required Using the straight-line method, compute the depreciation expense for 2016 and 2017. & Prepare the general journal entry to record the 2016 depreciation. c. Assum a. e that the taxi was sold on January 1, 2018, for $22,000. Prepare the journal entry for the sale of the taxi in 2018.Explanation / Answer
(1)depreciation expenses on straight line method will be same for the year 2016 and 2017
=Value of assets-salvage value/useful life of assets
=($36,000+$1,200)-$4,000/5
=$6,640
JOURNAL Date particular Debit Credit 31/12/16 Depreciation a/c . Dr. $6,640 To Accumulated Depreciation a/c $6,640 (Being depreciation recorded) 1/1/18 Cash a/c . Dr. $22,000 Loss on sale a/c . Dr. $1,920 To Sale of taxi a/c $23,920 (Being taxi sold)Related Questions
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