Business, 16.03.2020 22:43 megamegs80

On July 1, 2016, Farm Fresh Industries purchased a specialized delivery truck for $126,000. At the time, Farm Fresh estimated the truck to have a useful life of eight years and a residual value of $30,000. On March 1, 2021, the truck was sold for $58,000. Farm Fresh uses the straight-line depreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Required:1. Prepare the journal entry to update depreciation in 2021.2. Prepare the journal entry to record the sale of the truck.3. Assuming that the truck was instead sold for $80,000, prepare the journal entry to record the sale.

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Answer from: emmaraeschool

Part 1. Prepare the journal entry to update depreciation in 2021.

Depreciation Expense $ 2,000 (debit)

Accumulated Depreciation $ 2,000 (credit)

Part 2. Prepare the journal entry to record the sale of the truck.

Cash $58,000 (debit)

Accumulated Depreciation $ 56,000 (debit)

Loss on Sale of Delivery Truck $12,000 (debit)

Delivery Truck $ 126,000 (credit)

Part 3. Assuming that the truck was instead sold for $80,000

Cash $80,000 (debit)

Accumulated Depreciation $ 56,000 (debit)

Profit on Sale of Delivery Truck $10,000 (credit)

Delivery Truck $ 126,000 (credit)

Explanation:

Part 1. Prepare the journal entry to update depreciation in 2021.

Depreciation Expense 2021 = ( 126000-30000)/8×2/12

= 2000

Part 2. Prepare the journal entry to record the sale of the truck.

Accumulated Depreciation

2016= (126000-30000)/8×1/2 =6000

2017 to 2020 = (126000-30000)/8×4=48000

2021= ( 126000-30000)/8×2/12 = 2000

Total Depreciation = 56000

Loss on Sale = Selling Price less Carrying Amount

= $58,000-($126,000-$56,000)

= - $12,000

Part 3. Assuming that the truck was instead sold for $80,000

Profit on Sale = Selling Price less Carrying Amount

= $80,000-($126,000-$56,000)

= $10,000

Note; Carrying Amount of an Asset = Cost less Accumulated Depreciation

Answer from: Quest

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

Answer from: Quest

He needs to contact his accountant as well as his marketing team

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On July 1, 2016, Farm Fresh Industries purchased a specialized delivery truck for $126,000. At the t...

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