When originally purchased, a vehicle had an estimated useful life of 8 years. The vehicle cost $23,000 and its estimated salvage value is $1,500. After 4 years of straight-line depreciation, the asset’s total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. The depreciation expense in year 5 equals:
Describe how accounts receivable arise and how they are accounted for, including the use of a subsidiary ledger and an allowance account.
Explain the purpose of and method of depreciation for partial years.