Chap10 Class Example5 Solution (student) 2010

Chap10 Class Example5 Solution (student) 2010 - 1,400 Accum...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Victor Leung ACCT2111 (2010) Chapter 10 1 Chapter 10 Solution 1. The cost of the truck is $11,000 computed as follows. Cash price $8,000 Sales taxes 3,000 Cost of truck $11,000 (a) Entry for the purchase of the truck: April 1 2007 Truck 11,000 Cash 11,000 (b) Entry for the related expenditures: April 1 2007 License Expense -Truck 1,200 Prepaid Insurance 3,600 Cash 4,800 (c) Year-end depreciation expense (9 months): Depreciation expense per year = [($11,000 – $1,400]/4 = $2,400 per year Dec 31 2007 Depreciation Expense – Truck 1,800 Accum. Depreciation – Truck 1,800 [$2,400 /12 x 9] (d) Year-end adjustment for related expenses: Dec 31 2007 Prepaid License Fee – Truck 300 License Expense –Truck 300 Dec 31 2007 Insurance Expense 2,700 Prepaid Insurance 2,700
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Victor Leung ACCT2111 (2010) Chapter 10 2 2. (a) Updating the depreciation expense for January - July 1999 July 31 Depreciation Expense - Truck
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 1,400 Accum Depreciation - Truck 1,400 [$2,400 /12 x 7] Recording the loss on disposal of the old asset July 31 Accum. Depreciation - Truck 5,600 Loss on Disposal ($11,000- $5,600) 5,400 Truck 11,000 [Accum. Depreciation = $2,400 / 12 x (9 + 12 + 7) = $5,600] [Book Value = $11,000 - $5,600 = $5,400] (b) Updating the depreciation expense for January - July 1999 July 31 Depreciation Expense - Truck 1,400 Accum Depreciation - Truck 1,400 Recording the gain on disposal of the old asset July 31 Accum. Depreciation - Truck 5,600 Cash 6,000 Gain on Disposal ($6,000 - $5,400) 600 Truck 11,000 (c) Updating the depreciation expense for January - July 1999 July 31 Depreciation Expense - Truck 1,400 Accum Depreciation - Truck 1,400 Recording the loss on disposal of the old asset July 31 Accum. Depreciation – Truck 5,600 Cash 3,500 Loss on Disposal ($5,400 - $3,500) 1,900 Truck 11,000...
View Full Document

This note was uploaded on 02/04/2012 for the course ACCT 2111 taught by Professor Eric during the Spring '11 term at CUHK.

Page1 / 2

Chap10 Class Example5 Solution (student) 2010 - 1,400 Accum...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online