Question

Charger Cheung purchased a truck at the beginning of July 2020 for $41 500. Charger decided to depreciate the truck over a six-year period using the straight-line method and estimated its residual value to be zero. In July 2021, Charger determined that a four-year life instead of six-year should have been used to depreciate the truck.

Required: Determine the amounts to be recorded as depreciation expense for 2021 and the journal entry to record depreciation expense Determine the amounts to be recorded as depreciation expense for 2022 and how to report the truck on balance sheet.

Answer 1

Solution:

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