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A truck was acquired on July 1, 2023, for $189,000. The truck had a six-year useful life and an estimated salvage value of $21,000. The straight-line method of depreciation was used. On January 1, 2026, the truck was overhauled for $17,500, which extended the useful life of the truck for an additional two years beyond that originally estimated (salvage value is still estimated at $21,000). In computing depreciation for annual adjustment purposes, expense is calculated for each month the asset is owned.   Instructions Prepare the appropriate entries for January 1, 2026 and December 31, 2026

A truck was acquired on July 1, 2023, for $189,000. The truck had a six-year useful life and an estimated salvage value of $21,000. The straight-line method of depreciation was used. On January 1, 2026, the truck was overhauled for $17,500, which extended the useful life of the truck for an additional two years beyond that originally estimated (salvage value is still estimated at $21,000). In computing depreciation for annual adjustment purposes, expense is calculated for each month the asset is owned.   Instructions Prepare the appropriate entries for January 1, 2026 and December 31, 2026

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter18: Accounting For Long-term Assets
Section: Chapter Questions
Problem 10SPB: IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE CALCULATION OF DEPRECIATION On January 1, 20-1, Dans...
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A truck was acquired on July 1, 2023, for $189,000. The truck had a six-year useful life and an estimated salvage value of $21,000. The straight-line method of depreciation was used. On January 1, 2026, the truck was overhauled for $17,500, which extended the useful life of the truck for an additional two years beyond that originally estimated (salvage value is still estimated at $21,000). In computing depreciation for annual adjustment purposes, expense is calculated for each month the asset is owned.

 

Instructions

Prepare the appropriate entries for January 1, 2026 and December 31, 2026 

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