Accounting 201 Chapter 10

On Jan 1, 2010, you purchased a vehicle costing $28,000 with additional costs of taxes, $1,750 and shipping costs, $250. Based on historical records, you estimate the useful life to be 8 years and the estimated salvage value to be $1,500. You depreciate this vehicle using the double declining balance depreciation method. On January 1, 2014, you revised the asset’s total estimated useful life from 8 years to 9 years and change the estimated salvage value to $1,000. Required: 1. Compute the depreciation for each year and a) prepare the appropriate adjusting journal entry to record the depreciation for years 1, 5, and 9 and b) show the balance sheet presentation of the vehicle for years 5 and 9. (Round answers to 0 decimal places). 2. Balance sheet presentation