Essay
On January 2,2010,a company purchased a delivery truck for $45,000 cash.The truck had an estimated useful life of seven years and an estimated salvage value of $3,000.The straight-line method of depreciation was used.Prepare the journal entries to record depreciation expense and the disposition of the truck on September 1,2014,under each of the following assumptions:
a.The truck and $45,000 cash were given in exchange for a new delivery truck that had a cash price of $60,000.This transaction has commercial substance.
b.The truck and $40,000 cash were exchanged for a new delivery truck that had a cash price of $60,000.This transaction lacks commercial substance.
Correct Answer:
Verified
Correct Answer:
Verified
Q33: Cliff Company traded in an old truck
Q34: Schwartz Co.paid $780,000 cash to buy the
Q35: Revenue expenditures:<br>A)Are additional costs of plant assets
Q37: Minor Company installs a machine in its
Q39: Marks Consulting purchased equipment costing $45,000 on
Q40: Minor Company installs a machine in its
Q41: A company needed a new building.It found
Q61: A building was purchased for $370,000 and
Q63: Revenue expenditures to keep an asset in
Q157: A _results from revising estimates of