FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $25,100. In addition, City paid sales tax and title fees of
$910 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $6,550.
Required
a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2.
b & c. Assume that the taxi was sold on January 1, Year 3, for $20,960. Prepare the general journal entries to record the Year 1
depreciation and sale of the taxi in Year 3.
Complete this question by entering your answers in the tabs below.
Req A
Req B and C
Assume that the taxi was sold on January 1, Year 3, for $20,960. Prepare the general journal entries to record the Year 1 depreciation
and sale of the taxi in Year 3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
<
2
Record entry for sale of taxi and gain on sale.
Note: Enter debits before credits.
Date
Year 3 Accumulated depreciation
General Journal
Cash
Gain on sale
Taxi
Debit
7,056
20,960
Credit
>
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Transcribed Image Text:City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $25,100. In addition, City paid sales tax and title fees of $910 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $6,550. Required a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2. b & c. Assume that the taxi was sold on January 1, Year 3, for $20,960. Prepare the general journal entries to record the Year 1 depreciation and sale of the taxi in Year 3. Complete this question by entering your answers in the tabs below. Req A Req B and C Assume that the taxi was sold on January 1, Year 3, for $20,960. Prepare the general journal entries to record the Year 1 depreciation and sale of the taxi in Year 3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 2 Record entry for sale of taxi and gain on sale. Note: Enter debits before credits. Date Year 3 Accumulated depreciation General Journal Cash Gain on sale Taxi Debit 7,056 20,960 Credit >
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