Available under Creative Commons-NonCommercial-ShareAlike 4.0 International License.
St. Laurent Limited purchased a truck for cash on January 1, 2016. The company’s fiscal year-end is December 31. The company uses the ½ year rule to calculate depreciation in the year of acquisition and disposal. The following details apply:
On March 1, 2017, the company paid $3,500 for gas and oil, a tune-up, new tires, and a battery. It also paid $4,000 to install a lift on the back of the truck. The latter amount is material.
Required:
- Prepare journal entries to record
- the purchase of the truck
- depreciation for 2016
- the 2017 expenditures relating to the truck
- depreciation for 2017.
- Prepare the journal entries to record the sale of the truck on March 3, 2018 for $8,000 cash, including 2018 depreciation expense.
- 1418 reads
