Oriole Ltd. purchased a delivery truck on July 1, 2021. The list price of the new truck was $87,000. Oriole offered a used truck as a trade-in on the purchase. The used truck had been purchased for $36,000 and the accumulated depreciation to the date of the exchange was $33,300. Oriole looked up the fair value of the used truck on a local web site and found that its used truck had resale value of $4,500. The dealer offered a $6,700 trade-in allowance on the purchase of the new truck. The deal was concluded and Oriole paid $80,300 on the exchange. On November 1, 2021, a set of snow tires were purchased for $1,100. On December 31, 2021, the company's year-end, Oriole recorded depreciation using the straight-line method, using an estimated useful life of 6 years and an estimated residual value of $5,900. On January 2, 2022, an in experienced driver had an accident and totally destroyed the truck. The insurance company paid Oriole $76,625 for the truck. Record all of the transactions described in the above events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
Oriole Ltd. purchased a delivery truck on July 1, 2021. The list price of the new truck was $87,000. Oriole offered a used truck as a trade-in on the purchase. The used truck had been purchased for $36,000 and the accumulated depreciation to the date of the exchange was $33,300. Oriole looked up the fair value of the used truck on a local web site and found that its used truck had resale value of $4,500. The dealer offered a $6,700 trade-in allowance on the purchase of the new truck. The deal was concluded and Oriole paid $80,300 on the exchange. On November 1, 2021, a set of snow tires were purchased for $1,100. On December 31, 2021, the company's year-end, Oriole recorded depreciation using the straight-line method, using an estimated useful life of 6 years and an estimated residual value of $5,900. On January 2, 2022, an in experienced driver had an accident and totally destroyed the truck. The insurance company paid Oriole $76,625 for the truck. Record all of the transactions described in the above events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 55P
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Transcribed Image Text:Oriole Ltd. purchased a delivery truck on July 1, 2021. The list price of the new truck was $87,000. Oriole offered a used truck as a trade-in on the purchase. The used truck had been purchased for $36,000 and the accumulated depreciation to the date of
the exchange was $33,300. Oriole looked up the fair value of the used truck on a local web site and found that its used truck had resale value of $4,500. The dealer offered a $6,700 trade-in allowance on the purchase of the new truck. The deal was
concluded and Oriole paid $80,300 on the exchange. On November 1, 2021, a set of snow tires were purchased for $1,100. On December 31, 2021, the company's year-end, Oriole recorded depreciation using the straight-line method, using an estimated
useful life of 6 years and an estimated residual value of $5,900. On January 2, 2022, an in experienced driver had an accident and totally destroyed the truck. The insurance company paid Oriole $76,625 for the truck.
Record all of the transactions described in the above events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter
0 for the amounts.)
Date
July 1, 2021
Jan. 2, 2022
Account Titles and Explanation
Debit
Credit
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