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A corporation acquired a truck on July 1, 2012, at a cost of $162,000. The truck has a six-year useful life and an estimated salvage value of $18,000. The straight-line method of depreciation was used. On January 1, 2015, the truck was overhauled atr a cost of $15,000, which extended the useful life of the truck for an additional two years beyond that originally estimated (salavge value is still estimated at $18,000). In computing depreciation, the corportation uses the nearest full month assumption to calculate depreciation.

Calculate the depreciable base of the truck, before and after the overhaul on January 1, 2015.

Prepare the appropriate entries for January 1, 2015 and Decemeber 31, 2015.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9796058

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