Es timatedus efullife 72 y ears 2

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Unformatted text preview: ent (es timated res idual v alue, $8,700) Ac c umulated deprec iation (s traight­line, three y ears ) $ 27,600 8,100 On Dec ember 31, 2012, the deliv ery truc k was a total los s as the res ult of an ac c ident. Required: 1. Bas ed on the data giv en, c ompute the es timated us eful life of the truc k . Es timated us eful life 7 ± 2% y ears 2. Prepare all journal entries with res pec t to the truc k on Dec ember 31, 2012. (Om it the "$" sign in your response.) Date General J ournal Dec . 31 2012 Deprec iation ex pens e Ac c umulated deprec iation Dec . 31 2012 Ac c umulated deprec iation Los s on dis pos al of truc k Truc k Explanation: 1. Deprec iation ex pens e per y ear: Debit 2,700 ± 2% 10,800 ± 2% 16,800 ± 2% Credit 2,700 ± 2% 27,600 ± 2% $8,100 ac c umulated deprec iation ÷ 3 y ears of us age = $2,700 per y ear Es timated us eful life: ($27,600 − $8,700) × 1/? us eful life = $2,700 per y ear $18,900 / $2,700 = 7 y ear us eful life 2. To bring ac c umulated deprec iation up to the date of the ac c idental los s ($27,600 − $8,700) × 1/7 = $2,700. Ac c umulated deprec iation ($8,100 + $2,700) = $10,800 5. awar d: 0.20 out of 0.20 points E8-12 Inferring Asset Impairment and Recording Disposal of an Asset LO4, 5 In a rec ent 10­K report, United Parc el Serv ic e s tates it "is the world's larges t pac k age deliv ery c ompany , a leader in the U.S. les s ­than­truc k load indus try , and a global leader in s upply c hain management." The following note and data were reported: Note 1—Sum m ary of Accounting Policies Im pairm ent of Long­Lived Assets . . . we rev iew long­liv ed as s ets for impairment when c irc ums tanc es indic ate the c arry ing amount of an as s et may not be rec ov erable bas ed on the undis c ounted future c as h flows of the as s et. . . . Cos t of property and equipment (beginning of y ear) Cos t of property and equipment (end of y ear) Capital ex penditures during the y ear Ac c umulated deprec iation (beginn...
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This homework help was uploaded on 02/23/2014 for the course BUSE 30000 taught by Professor N/a during the Winter '12 term at UChicago.

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