Tony and Suzie purchase a Suburban for $12000. The vehicle is purchased in late June and will be put into use on July 1 2013. Annual insurance from GEICO
runs $1800 per year. The paint is starting to fade so they spend an extra $3000 to repaint the vehicle placing the Great Adventures logo on the front hoood
back and both sides. An additional $2000 is spent on a deluxe roof rack and a trailer hitch. They expect to use the Suburban for five years and then sell the
vehicle for 4500.
1. Determine the amount that should be recorded for the new vehicle.
2. Indicate where any amounts not included in the Equipment account should be recorded.
3. Prepare a depreciation schedule using the straight line. The first and last years will have a half year of depreciation due to the beginning of service life
on July 1.
4. Record the sale of the vehicle two years later on July 1 2015 for $10000.