Question attached. Can not figure out disposals. jog;kjgh
Chapter 9 ? PROPERTY & DEPRECIATION
Asset: Truck purchased for $30,000. Estimated life is 5 years, with $5,000 salvage value.
1. Straight line method Change in Estimates
Suppose that after three years of straight-line depreciation, you determine that the truck
will last 6 years instead of 5 years, but its salvage will only be $3,000. Determine the
amount of depreciation to record in each year, beginning with year 4. Disposals
Assume instead that after 3-1/2 years, you dispose of truck.
FIRST, you must adjust depreciation through the date of disposal with the following
entry: Net book value of truck is now $________________ a) Truck is ?junked? b) Truck is sold for $10,000 c) Truck is sold for $13,700