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Computing and Revising Depreciation: Selling Plant Assets

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2007

Jan 1 Paid $22, 989 cash plus $1,823 in sales tax for a new delivery truck estimated to have a five year life and a $3,560 salvage value. Delivery truck costs are recorded in the Trucks account.

Dec 31 Recorded annual straight-line depreciation on the truck.

2008

Dec 31 Due to new information obtained earlier in the year. The truck's estimated useful life was changed from five years to six years, and the estimated salvage value was increased to $ $5,350 annual straight-line depreciation on the truck.

2009

Dec 31 Recorded annual straight-line depreciation on the truck
Dec 31 Sold the truck for $6,570 cash.

Required:
Prepare a journal entries to record these transactions and events.

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Solution Summary

The solution computes and revises depreciation associated with selling plant assets.

Solution Preview

2007
DR: Delivery truck 24,812
CR: Cash 24,812
1823+22989

DR: Depreciation expense 4,250
CR: Accumulated depreciation - delivery ...

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