a. On January 1 Pete bought a used truck for $14000. He added a tool chest and s

a. On January 1 Pete bought a used truck for $14000. He added a tool chest and side racks for ladders for $4800. The truck is expected to last four years and then be sold for $800.
b. On January 1 he purchased several items at an auction for a total of $2400. These items had fair market values as follows:
10 cases of paint trays and roller covers $ 200 Storage cabinets $600 Ladders & scaffolding $2400Pete will use all the paint trays and roller covers this year. The storage cabinets are expected to last nine years and the ladders and scaffolding for four years.c. On February 1 Pete paid the city $1500 for a three-year license to operate the business.
d. On September 1 Pete sold an old truck for $4800. The truck had cost $12000 when it was purchased on September 1 2002. It had been expected to last eight years and have a salvage value of $800.Problems:1.Explain the value assigned to each asset when it is purchased [or for part (d) the book value when sold].
2. Determine the amount of depreciation or other expense to be recorded for each asset for 2007.
3. Prepare a balance sheet as of December 31 2007 using straight line depreciation.