A Truck Has a New Engine Installed for $155,000 Which

question 1

Essay

A truck has a new engine installed for $155,000 which will increase gas mileage by 25% and reduce pollution. Originally, the truck and engine were not set up as separate assets. Management confidently estimates that the cost of the engine is one-third of the overall cost of the truck. The truck's original cost was $420,000 and it is 40% depreciated.
Prepare the necessary journal entries to record the transaction. Provide a short justification for your chosen treatment.

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Definitions:

Omnipotent Authority

The concept of having unlimited power and authority, often referred to in the context of a deity or a hypothetical leader with absolute control.

Developing Others

The act of helping people grow and improve their skills or abilities, often through teaching, mentoring, or leadership.

Encouragement

The act of giving support, confidence, or hope to someone.

Galatea Effect

An individual’s high self-expectations lead to high performance.