1. Business
2. Accounting
3. Financial Accounting & Bookkeeping
4. The Accounting Cycle
5. 232130

Mar 1
Purchased a truck for $30,000, w/a 5 year useful life and a $5,000 salvage value. Also paid 6% sales tax, $350 for the annual truck license, $500 to paint the truck w/ company colors and name, and $1500 for spare parts. All payments in cash

May 10
Purchased garage from neighboring business w/a 7.4%, 4 year, $75,000 note. The sellers book value for the garage was $42,750. The estimated remaining useful life of the garage is 10 years.

June 1
Paid $1,000 cash to relace (uninsured) garage windows broken during storm.

Aug 25
Purchased used office equipment for $14,700 cash. Sales tax was $825 freight costs $250, and reconditioning costs $900, all of which were paid in cash. The estimated useful life of the equipment is 3 years and salvage value is $500.

Oct 5
Purchased store equipment for $24,500 cash. Paid $1,470 in sales tax, $550 for repairs incurred from an accident during installation, $3,200 for a special base to house the equipment, and $2,600 for supplies to be used during periodic preventive maintenance. The estimated useful life of the equipment is 8 years and salvage value is $1,200.