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Homework answers / question archive / Yoshi Company completed the following transactions and events involving its delivery trucks

Yoshi Company completed the following transactions and events involving its delivery trucks

Finance

Yoshi Company completed the following transactions and events involving its delivery trucks.

 

Year 1

Jan. 1 Paid $23,515 cash plus $1,785 in sales tax for a new delivery truck estimated to have a five-year life and a $2,450 salvage value. Delivery truck costs are recorded in the Trucks account.Dec. 31 Recorded annual straight-line depreciation on the truck.

 

Year 2

Dec. 31 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.

 

Year 3

Dec. 31 Recorded annual straight-line depreciation on the truck.Dec. 31 Sold the truck for $5,300 cash.

 

Required:

1-a. Calculate depreciation for Year 2.

1-b. Calculate book value and gain (loss) for sale of Truck on December 31, Year 3.

1-c. Prepare journal entries to record these transactions and events.

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