Yoshi Company completed the following transactions and events involving its deli

Question

Yoshi Company completed the following transactions and events involving its delivery trucks 2016 Jan. 1 Paid $22,015 cash plus 1,785 in sales tax for a new delivery truck estimated to have a five-year life and a Dec. 31 Recorded annual straight-line depreciation on the truck 2017 Dec. 31 Due to new information obtained earlier in the year, the truck's estimated useful life was changed from five to tlve-year te $2,150 salvage value. Delivery truck costs are recorded in the Trucks account. on the trded, la the Trucks acound. four years, and the estimated salvage value was increased to $2,700- Recorded annual straight-line depreciation on the truck. 2018 Dec. 31 Recorded annual straight-line depreciation on the truck. Dec. 31 Sold the truck for $5,600 cash. Required: 1-a. Calculate depreciation for year 2017, 1-b. Calculate book value and gain (loss) for sale of Truck on December, 2018. 1-c. Prepare journal entries to record these transactions and events Complete this auestion bv enterina vour answers in the tabs below

Explanation / Answer

CALCULATION OF COST OF TRUCK Cost of the Truck $               22,015.00 Add: Sales Tax $                 1,785.00 Total $               23,800.00 Less : Salvage Value $                 2,150.00 Value for the depreciation $               21,650.00 Life of the assets = 5 years Depreciation per year = Life of the assets / Life of the assets Depreciation per year = $                 4,330.00 ( $ 21,650 / 5 years) Depreciation charges in the year 2016 = $ 4,330 Depreciation for the year 2017 Value of the truck $               23,800.00 Less : Depreciation for the 2016 $                 4,330.00 Book Value at op. 2017 $               19,470.00 Less : Depreciation for the 2017 $                 4,330.00 Book Value at Closing 2017 $               15,140.00 Less : Salvage Value $                 2,700.00 Value for the depreciation 2018 $               12,440.00 Life of the assets = 4 years No, only 2 years is left for depreication Depreciation per year = Life of the assets / Life of the assets Depreciation per year = $                 6,220.00 ( $ 12,440 / 2 years) Calculation of Gain or loss on sale Purchase value = $               23,800.00 Less: Depreciation for the year 2016 $                 4,330.00 Depreciation for the year 2017 $                 4,330.00 Depreciation for the year 2018 $                 6,220.00 Book Value at the sale point $                 8,920.00 Less: Sales Value $                 5,600.00 Loss on Sale= $                 3,320.00 JOURNAL Journal Date Particulars Debit Credit Dec , 31 2017 Depreciation Expenses $                       4,330       To Truck $                       4,330 (Being depreciation charged for the year 2017) Dec , 31 2018 Depreciation Expenses $                       6,220       To Truck $                       6,220 (Being depreciation charged for the year 2018) Dec , 31 2018 Cash Account $                       5,600 Loss on sales of Truck $                       3,320          To Truck $                       8,920

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