sales Révenue (net) ? (14,000) 32 Inventory at cost Beginng Purchases at cost 24
ID: 2600321 • Letter: S
Question
sales Révenue (net) ? (14,000) 32 Inventory at cost Beginng Purchases at cost 24,000 287,000 305 00O 0 Gross Profit ratio= GM/ Sales Revenue- 32% T1-(20 points) HGV Co. $295, 000 paying $55, 000 cash and $240,000 N/P. 35s purchased a truck on Jan. 3, 2012 for e truck is estimated to run 135,000 miles. and to havers The truck value of $25, 000 at retirement. The with the tolLowing milage: 2012, 38 d to have salvage truck is used for 3 years , 000 miles 2013, 32,000 miles 2014 27,000 miles a) journalize the truck purchase and depreciation transactions using S.L.-OUTPUT method based on milage: compute cost per mile and depreciation Expense for each of the 3 years indicated. b) Compute Accumulated Depreciation and Book Value at the end of the three years after which the truck is sold. 1 25Explanation / Answer
II) a) Depreciation per unit of output = (Cost of Truck - Salvage value)/Estimated mileage
= ($295,000 - $25,000)/135,000 = $2 per mile
Journal Entries (Amount in $)
b) Accumulated depreciation at the end of three years = $76,000+$64,000+$54,000 = $194,000
Book Value of Truck at the end of three years = $295,000-$194,000 = $101,000
c) 1) Journal Entries for sale of truck (Amount in $)
2) Journal Entries for sale of truck (Amount in $)
3) Journal Entries for exchange of truck (Amount in $)
Date Account Titles and explanation Debit Credit Jan.3, 2012 Truck 295,000 Cash 55,000 Note Payables 240,000 (To record the purchase of truck) Dec.31, 2012 Depreciation Expense ($2*38,000) 76,000 Accumulated Depreciation 76,000 (To record the depreciation on truck) Dec.31,2013 Depreciation Expense ($2*32,000) 64,000 Accumulated Depreciation 64,000 (To record the depreciation on truck) Dec.31,2014 Depreciation Expense ($2*27,000) 54,000 Accumulated Depreciation 54,000 (To record the depreciation on truck)Related Questions
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