Question
In: Accounting
The Parker Piano Company purchased a Delivery Truck on January 1, 2025 for $50,000 which included...
The Parker Piano Company purchased a Delivery Truck on January 1, 2025 for $50,000 which included all costs to get the asset ready for use. The truck has an anticipated life of 100,000 miles or 4 years. The estimated residual value at the end of the assets service life is expected to be $2,000. For assets of this type, the company utilizes the straight-line depreciation method.
- Record the purchase of the asset.
|
Date |
Account Name |
Debit |
Credit |
- Complete the depreciation table below.
|
Period Ended |
Depreciation Expense |
Accumulated Depreciation |
End of Period Book Value |
|
December 31, 2025 |
|||
|
December 31, 2026 |
|||
|
December 31, 2027 |
|||
|
December 31, 2028 |
- Record the entry for December 31, 2025 to record the depreciation for the year.
|
Date |
Account Name |
Debit |
Credit |
- Suppose the company sells the van on December 31, 2027 for $18,000 cash. Provide the journal entry to record the sale.
|
Date |
Account Name |
Debit |
Credit |
- Assume the company chooses to use the units-of-production method. Based on the information below, complete the depreciation schedule.
|
Year |
Miles Driven |
|
2025 |
27,000 |
|
2026 |
24,000 |
|
2027 |
32,000 |
|
2028 |
22,000 |
|
Period Ended |
Depreciation Expense |
Accumulated Depreciation |
End of Period Book Value |
|
December 31, 2025 |
|||
|
December 31, 2026 |
|||
|
December 31, 2027 |
|||
|
December 31, 2028 |
Solutions
Expert Solution
As per guidelines, answering first four
A) Journal Entry for purchase of asset
Date 01 January 2025
Delivery Truck A\c Debit
To Cash/Bank A\C Credit
( Being delivery Truck purchased for cash)
B) Depreciation = (purchase value - salvage value)/usefull life of asset
Therefore Depreciation = (50,000 - 2,000)/4
= 12,000
So, Table will be filled as
Date Depreciation /accumulated/ residual
Dec 31 2025 12000 / 12000 / 38000
2026 12000 / 24000/ 26000
2027 12000 / 36000/ 14000
2028 12000/ 48000/ 2000(scrap value)
C) Journal entry for recording Depreciation
Dec 31 2025 Depreciation expense A/c Debit 12000
To accumulated Depreciation a/c 12000
D) entry for sale of asset
Dec 31st 2027 Cash A_/c debit 18000
Accumulated depreciation a/c debit 36000
To delivery truck a/c 50,000
To profit on sale 4,000
Calculation of accumulated Depreciation
Yearly Depreciation 12000
Usage 3 years
Therefore accumulated Depreciation 12000 × 3 = 36000
ekkarill92 answered 2 years agoRelated Solutions
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Part II – Chapter 8
Company
A Company
B Company
C
Days sales in
receivables 8.3
days 39.9
days 60.3
days
Days sales in
inventory 2.3...
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