The following information applies to the questions displayed below Tony and Suzi
ID: 2534911 • Letter: T
Question
The following information applies to the questions displayed below Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase o used Suburban. The cost of the Suburban is $10,400. The vehicle is purchased in late June and will be put into use on July 1, 2019. Annual insurance from GEICO runs $1,600 per year. The paint is starting to fade, so they spend an extra $2,600 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides. An additional $1.600 is spent on a deluxe roof rack and a trailer hitch. The painting. roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. They expect to use the Suburban for five years and then sell the vehicle for $4,100.Explanation / Answer
3) Book Value of Vehicle :-
= $10400 + $2600 + $1600
= $14600
Depreciation Exp. = ($14600 - $4100)/5
= $2100
4) Journal Entry :-
Years Depreciation Exp. Accum. Dep. Book Value 1 (2100/2) = 1050 1050 13550 2 2100 3150 11450 3 2100 5250 9350 4 2100 7350 7250 5 2100 9450 5150 6 1050 10500 4100 Total 11550Related Questions
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