On 1 January 2010, the CB Company purchased for $18000, new vehicle. The delivery cost was...

On 1 January 2010, the CB Company purchased for $18000, new vehicle. The delivery cost was a $2000. CB estimated the vehicle will have a residual value of $2000 at the end of its useful life of 6 years. CB Company estimated the vehicle could drive 180,000 km. The vehicle was driven 10,000 km during the year ending at 30 June 2010; 20000 km in the year ending 30 June 2011; 5000 km in the year ending 30 June 2012.

Required: A) Prepare journal entries to record the depreciation for the first 3 years( assume straight line method is used)

B) Prepare the journal entry to record the sale of the vehicle for $3500 on 30 June 2012 using the reducing balance method.

C) Assuming straight line method was used, CB ltd sold the vehicle after one year for $18000. Record the transaction.

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Expert Solution

ekkarill92 answered 1 year ago

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