On 2007 January 1, Wood Company purchased a truck for USD 43,200 cash. The truck has an estimated useful life of six years and an expected salvage value of USD 5,400. Depreciation on the truck was computed using the straight-line method.
a. Prepare a schedule showing the computation of the book value of the truck on 2009 December 31.
b. Prepare the journal entry to record depreciation for the six months ended 2010 June 30.
c. Prepare journal entries to record the disposal of the truck on 2010 June 30, under each of the following unrelated assumptions:
(a)The truck was sold for USD 3,600 cash.
(b)The truck was sold for USD 25,200 cash.
(c)The truck was scrapped. Used parts valued at USD 6,660 were salvaged.
(d)The truck (which has a fair market value of USD 10,800) and USD 32,400 of cash were exchanged for a used back hoe that did not have a known market value. The transaction has commercial substance.
(e)The truck and USD 29,700 cash were exchanged for another truck that had a cash price of USD 51,300. The exchange has no commercial substance.
(f) The truck was stolen July 1, and insurance proceeds of USD 7,560 were expected.