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.

  1. Record the purchase of the asset.

Date

Account Name

Debit

Credit
  1. 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
  1. Record the entry for December 31, 2025 to record the depreciation for the year.

Date

Account Name

Debit

Credit

  1. 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

Solutions

Expert Solution

Journal entry for purchase of Delivery truck

Date Account name Debit Credit

Jan 1, 2025 Delivery truck $ 50,000

Cash $ 50,000

( To purchase of Truck for cash)

Calculation of Depreciation P.a = (Cost of Truck - Salvage value ) / Life of Truck

= ($ 50,000 - $ 2,000) / 4

= $ 12,000

DEPRECIATION TABLE

-----------------------------------------------------------------------------------------------------------------------------------------

Period ended Depreciation Accumulated End of period

expense Depreciation book value

-------------------------------------------------------------------------------------------------------------------------------------------

Dec 31,2025 $ 12,000 $ 12,000 $ 38,000

Dec 31,2026 $ 12,000 $ 24,000 $ 26,000

Dec 31, 2027 $ 12,000 $ 36,000 $ 14,000

Dec 31, 2028    $ 12,000 $ 48,000 $ 2,000

Entry for Depreciation on Dec 31,2025

Date Account name Debit Credit

Dec31, 2025 Depreciation expense $ 12,000

Accumulated Depreciation $ 12,000

( To depreiation provided )

Sale of Truck on Dec 31,2027 for $ 18,000 , Journal entry

Date Account name Debit Credit

Dec 31, 2027 Cash $ 18000

Accumulated deprecition $ 36,000

Gain on sale $ 4,000

Delivery truck $ 50,000

( To Truck sold and gain recognised)

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

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...
Swifty Company purchased a delivery truck for $26,000 on January 1, 2020. The truck has an...
Swifty Company purchased a delivery truck for $26,000 on January 1, 2020. The truck has an expected salvage value of $1,000, and is expected to be driven 100,000 miles over its estimated useful life of 10 years. Actual miles driven were 12,800 in 2020 and 12,000 in 2021. Calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciation expense $ per mile eTextbook and Media List of Accounts Compute depreciation expense for 2020...
Linton Company purchased a delivery truck for $28,000 on January 1, 2017. The truck has an...
Linton Company purchased a delivery truck for $28,000 on January 1, 2017. The truck has an expected salvage value of $2,200, and is expected to be driven 110,000 miles over its estimated useful life of 10 years. Actual miles driven were 12,300 in 2017 and 10,000 in 2018. Collapse question part (a1) Correct answer. Your answer is correct. Calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.52.) Depreciation expense $Entry field with correct...
linton company purchased a delivery truck for 33.000 on january 1 2017 the truck has an...
linton company purchased a delivery truck for 33.000 on january 1 2017 the truck has an expected salvage value of 1,300 and is expected to be driving 109,000 miles over its esitmated useful of life of 9 years. acutal miles driving were 15,400 for 2017 and 12,500 in 2018 what is the depreication expense for 2017 and 2018 using the stright line method , the unit of activity method and the decling balance method
Linton Company purchased a delivery truck for $29,000 on January 1, 2017. The truck has an...
Linton Company purchased a delivery truck for $29,000 on January 1, 2017. The truck has an expected salvage value of $2,100, and is expected to be driven 106,000 miles over its estimated useful life of 10 years. Actual miles driven were 15,300 in 2017 and 13,400 in 2018. Correct answer. Your answer is correct. Calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.52.) Depreciation expense $Entry field with correct answer .25 per mile...
ABC Delivery Company purchased a new delivery truck on January 1 with an original cost of...
ABC Delivery Company purchased a new delivery truck on January 1 with an original cost of $50,000. The company estimates it will use the truck for 5 years and drive a total of 100,000 miles. It plans to sell the truck at the end of the five years for $5,000. During the first year, the truck was driven 15,000 miles. What is the depreciation for the first year using the DoubleDeclining Balance method? $10,000 $18,000 $7,500 $20,000 $6,750 $9,000
On January 1, 2015, Jose Company purchased a building for $200,000 and a delivery truck for...
On January 1, 2015, Jose Company purchased a building for $200,000 and a delivery truck for $20,000. The following expenditures have been incurred during 2017: The building was painted at a cost of $5,000. To prevent leaking, new windows were installed in the building at a cost of $10,000. To improve production, a new conveyor system was installed at a cost of $40,000. The delivery truck was repainted with a new company logo at a cost of $1,000. To allow...
Exercise 9-7 Linton Company purchased a delivery truck for $29,000 on January 1, 2017. The truck...
Exercise 9-7 Linton Company purchased a delivery truck for $29,000 on January 1, 2017. The truck has an expected salvage value of $1,100, and is expected to be driven 109,000 miles over its estimated useful life of 5 years. Actual miles driven were 12,200 in 2017 and 10,000 in 2018. Calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.52.) Depreciation expense $___________ per mile Compute depreciation expense for 2017 and 2018 using (1)...
Bridgeport Company purchased a delivery truck for 27,000 on January 1,2020. The truck has an expected...
Bridgeport Company purchased a delivery truck for 27,000 on January 1,2020. The truck has an expected salvage value 1,500, and is expected to be driven 102,000 miles over its estimated useful life of 10 years. Actual miles driven were 12,800 in 2020 and 14,300 in 2021 Compute depreciation expense for 2020 and 2021 using the straight-line method, the units-of-activity method, and the double-declining-balance method
Ram Corporation purchased a new truck on January 1, 2020 for $50,000.  The truck is expected to...
Ram Corporation purchased a new truck on January 1, 2020 for $50,000.  The truck is expected to last five years with a residual value of $10,000.  Using straight-line depreciation, show the effect on the income statement and balance sheet of this transaction over the next five years. Income statement 2020                 2021                 2022                 2023                 2024 Depreciation expense    $8000               $8000               $8000               $8000               $8000 Balance Sheet 2020                 2021                 2022                 2023                 2024 Equipment                    $                      $                      $                      $                      $ Less: accumulated   Depreciation               (                   )       (                 )       (                 )        (                 )        (                  ) Book value                    $                      $                      $                      $                      $                                                                                                                                                              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...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT