Question

NeverLate Ltd. completed the following transactions involving delivery trucks: 2020 Mar. 26 Paid cash for a...

NeverLate Ltd. completed the following transactions involving delivery trucks:

2020
Mar. 26 Paid cash for a new delivery truck, $87,000 plus $6,600 of freight costs. The truck was estimated to have a five-year life and a $10,000 trade-in value.
Dec. 31 Recorded straight-line depreciation on the truck to the nearest whole month.
2021
Dec. 31 Recorded straight-line depreciation on the truck to the nearest whole month. However, due to new information obtained early in January, the original estimated useful life of the truck was changed from five years to four years, and the original estimated trade-in value was increased to $14,500.


Required:
Prepare journal entries to record the transactions. (Do not round intermediate calculations.)

Homework Answers

Answer #1

A change in useful life of asset is a change in accounting estimate and hence revised depreciation is charged prospectively over the remaining useful life of asset

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Yoshi Company completed the following transactions and events involving its delivery trucks. 2016 Jan. 1 Paid...
Yoshi Company completed the following transactions and events involving its delivery trucks. 2016 Jan. 1 Paid $22,015 cash plus $1,635 in sales tax for a new delivery truck estimated to have a five-year life and a $2,150 salvage value. Delivery truck costs are recorded in the Trucks account. 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 four...
Transactions for Fixed Assets, Including Sale The following transactions and adjusting entries were completed by Robinson...
Transactions for Fixed Assets, Including Sale The following transactions and adjusting entries were completed by Robinson Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. Year 1 Jan. 8. Purchased a used delivery truck for $61,440, paying cash. Mar. 7. Paid garage $230 for changing the oil, replacing the oil filter, and tuning the engine on the delivery truck. Dec. 31. Recorded depreciation on the truck for...
Transactions for Fixed Assets, Including Sale The following transactions and adjusting entries were completed by Robinson...
Transactions for Fixed Assets, Including Sale The following transactions and adjusting entries were completed by Robinson Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. Year 1 Jan. 8. Purchased a used delivery truck for $38,400, paying cash. Mar. 7. Paid garage $110 for changing the oil, replacing the oil filter, and tuning the engine on the delivery truck. Dec. 31. Recorded depreciation on the truck for...
Zephyr Minerals completed the following transactions involving machinery.      Machine No. 1550 was purchased for cash on...
Zephyr Minerals completed the following transactions involving machinery.      Machine No. 1550 was purchased for cash on April 1, 2017, at an installed cost of $83,000. Its useful life was estimated to be six years with a $14,000 trade-in value. Straight-line depreciation was recorded for the machine at the ends of 2017, 2018, and 2019. On March 29, 2020, it was traded for Machine No. 1795, with an installed cash price of $77,000. A trade-in allowance of $31,710 was received for...
Champion Contractors completed the following transactions involving equipment. Year 1 Jan. 1 Paid $302,000 cash plus...
Champion Contractors completed the following transactions involving equipment. Year 1 Jan. 1 Paid $302,000 cash plus $12,080 in sales tax and $1,800 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $30,200 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $5,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. 2016 Jan. 1 Paid $282,000 cash plus $11,280 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $28,200 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $4,000 to enclose the cab and install air conditioning in the loader to enable operations...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. 2016 Jan. 1 Paid $306,000 cash plus $12,240 in sales tax and $1,900 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $30,600 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $7,000 to enclose the cab and install air conditioning in the loader to enable operations...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in...
Champion Contractors completed the following transactions and events involving the purchase and operation of equipment in its business. 2016 Jan. 1 Paid $286,000 cash plus $11,440 in sales tax and $1,800 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $28,600 salvage value. Loader costs are recorded in the Equipment account. Jan. 3 Paid $5,000 to enclose the cab and install air conditioning in the loader to enable operations...
The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period....
The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. Year 1 Jan. 4. Purchased a used delivery truck for $27,680, paying cash. Nov. 2. Paid garage $725 for miscellaneous repairs to the truck. Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value...
The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period....
The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. Year 1 Jan. 4. Purchased a used delivery truck for $28,400, paying cash. Nov. 2. Paid garage $750 for miscellaneous repairs to the truck. Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT