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Jazz Manufacturing Limited purchased a new vehicle on January 1, 2019, for $60,000. The vehicle...

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Accounting

Jazz Manufacturing Limited purchased a new vehicle on January 1, 2019, for $60,000. The vehicle has a useful life of 5 years or 200,000km and management estimates they will be able to sell it for $5,000 at the end of its useful life. The vehicle was driven 25,000 km in 2019, 20,000 km in 2020, 24,000 km in 2021 and 26,000 km in 2022.

Required:

1. Calculate the depreciation expense for 2019, 2020, 2021 & 2022 using

  1. straight-line method
  2. Units of production method and
  3. Double-declining balance method

2. Assume that Jazz Manufacturing sold the vehicle on January 1, 2022, for $45,000. What is the gain or loss of the sale?

3. Prepare the journal entry to record the sale of the vehicle on January 1, 2022.

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