SnowMobile Information| SnowMobiles

Dec. 22
Traded the old company truck for a new truck issuing check number to complete the transaction. the old used truck cost $3800.00 and on September 30, the end of the quarter, had depreciated $2200. Straight line depreciation on the old truck us $40 per month.

The new truck for $20950 (taxes and destination included), and Auburn Saled allowed a $3000 trade in allowance on the purchase of the new vehicle.

An additional check for $540 was issued to the department of motor vehicles for the vehicle license fees.

Dec. 24 Sold two Trailer-tracker snowmobile and Norton Duo trailer at an out the door price of $11825.63 (sales tax included). The customer paid using a Bank Credit Card.

Merchandise
Item: Trailer tracker 1500 Qty: 2 Net cost per unit: $4116.00
Item: Norton Duo Trailer Qty: 1 Net cost per unit: $693.00

Qn 1
Assuming we depreciate to the nearest whole month instead of counting the days, you need to depreciate the truck for 3 more mths, at $40 per mth.
Dr Depreciation expense $120
Cr Accum. depn - truck $120

After this, the total accum. depn. is $2,320. The cost was $3,800, so net book value was $1,480. You received $3,000 for the truck, so you made a gain of $1,520.
Dr Truck (new) $20,950
Dr Accum. depn. $2,320
Dr Upkeep of truck expense $540
Cr Cash $18,490
Cr Truck (old) $3,800
Cr Gain on disposal of truck $1,520

Qn 2
Dr Cash $11,825.63
Cr Sales $11,156.25
Cr Sales tax payable $669.38 (assuming 6%)

Dr COGS $8,925
Cr Merchandise inventory $8,925

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