How would these assets appear on the balance sheet as of

Reference no: EM13482496

The following events took place at Pete's Painting Company during 2008:

a. On Jan 1, Pete bought a used truck for $14,000. He added a toolchest and side racks for ladders for $4,800. The truck is expected to last four years and then be sold for $800. Pete uses straight-line depreciation.

b. On Jan 1, he purchased several items at an auction for $2,400.These items had fair market values as follows:

10 cases of paint trays and rollercovers $ 200
Storagecabinets 600
Ladders andscaffolding 2,400

Pete will use all of the paint trays and roller covers this year. The storage cabinets are expected to last nine years; the ladders and scaffolding, four years.

a) On Feb 1, Pete paid the city $1,500 for a three-year license tooperate the business

b) On Sept 1, Pete sold an old truck for $4,800. The truck has cost$12,000 when it was purchased on Sept 1, 2003. It had been expectedto last eight years and have a salvage value of $800.

1. For each situation, explain the value assigned to the asset whenit was purchased [or for (d), the book value when sold].

2. Determine the amount of depreciation or other expense to berecorded for each asset for 2008.

3. How would these assets appear on the balance sheet as of Dec 31,2008

Reference no: EM13482496

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