Durham Bike Shop Ltd Durham Bike Shop Ltd

question 9

Essay

Durham Bike Shop Ltd.'s year end is December 31. Some of the company's transactions are as follows: $$\begin{array}{l}\text { March } 1 \text { Paid } \$ 190,000 \text { cash to purchase the following assets: }\\\\\begin{array} { l c c c } \text { Asset } & \begin{array} { c } \text { Market } \\\text { Value }\end{array} & \begin{array} { c } \text { Est. Useful } \\\text { Life }\end{array} & \begin{array} { c } \text { Est. Residual } \\\text { Value }\end{array} \\\text { Land } & \$ 88,000 & - & - \\\text { Building }& 132,000 & 25 \text { years } & \$ 14,000\end{array}\end{array}$$ Durham Bike Shop Ltd. plans to use the straight-line amortization method for the building.
April 15 Purchased a used pickup truck for $10,500 cash. The truck sells for $15,900 when new. The truck is expected to be used for eight years and driven 120,000 km. The estimated salvage value is $3,900. It will be amortized using the units-of-production method.
April 16 Installed heavy-duty racks costing $1,400 that will enable the truck to carry several bicycles.
June 30 Paid John's garage for an oil change ($35)and the replacement of a muffler ($425).
Dec. 31 Recorded amortization on the assets. The truck was driven 9,000 kilometres since it was purchased.
Record the above transactions of Durham Bike Shop Ltd. Round all amounts to the nearest dollar. Explanations are not required.

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Definitions:

Convert

To change something into a different form or properties, often used in context with currency, securities, or data transformation.