Please provide formulas for each entry with explanations. Thank you. Prepare a depreciation schedule showing depr....

Please provide formulas for each entry with explanations. Thank you.

Prepare a depreciation schedule showing depr. exp., accumulated depreciation and ending book value, year-by-year.
3 schedules for the 3 methods: straight-line, units-of-production, double declining basis. Asset is a delivery Truck.

Est. Life ………… 4
Orig. Cost Basis 24,700.00
Est. Residual Value 1,000.00
Est. total mileage 100,000
miles driven, Yr 1 22,800
miles driven, Yr 2 24,400
miles driven, Yr 3 29,400
miles driven, Yr 4 23,400
Part 2:
Assuming the truck is sold at the end of yr. 3, give the gen. journal entry to record the sale (straight-line method)
assume it was sold for: 6,800.00

Solutions

Expert Solution

Straight line method schedule :

Year	Depreciation expense	Accumlated depreciation	Book value
Year 1	5925	5925	18775
Year 2	5925	11850	12850
Year 3	5925	17775	6925
Year 4	5925	23700	1000

Unit of production schedule :

Year	Depreciation expense	Accumlated depreciation	Book value
Year 1	5403.6	5403.6	19296.40
Year 2	5782.8	11186.4	13513.60
Year 3	6967.8	18154.2	6545.80
Year 4	5545.8	23700	1000

Double decline method schedule :

Year	Depreciation expense	Accumlated depreciation	Book value
Year 1	12350	12350	12350
Year 2	6175	18525	6175
Year 3	3087.5	21612.5	3087.5
Year 4	2087.5	23700	1000

Straight line dep = (24700-1000/4) = 5925 per year

Accumlated dep for 3 years = 5925*3 = 17775

Journal entry

Date	accounts & explanation	debit	credit
	Cash	6800
	Accumlated depreciation	17775
	Loss on sale of truck	125
	Truck		24700
	(To record sale of truck)

ekkarill92 answered 1 year ago

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