Smithfield Corportation owns and operates three sawmills that make lumber for bu

    Smithfield Corportation owns and operates three sawmills that make lumber for building homes. The operations consist of cutting logs in the forest hauling them to the various sawmills sawing the lumber and shipping it to building supply warehouses throughout the western part of the United States. To haul the logs Smithfield has several trucks. Relevant data pertaining to one truck are:a. Date of purchase July 1 2001.b. Cost:Truck.$60000Trailer20000Paint job (to match company colors)1500Sales tax..3500c. Estimated useful life of the truck 150000 miles.d. Estimated salvage value zero.e. 2002 expenditures on truck:(1) Spent $5000 on tires oil changes greasing and other miscellaneous items.(2) Spent $22000 to overhaul the engine and replace the transmission on January 12002. This expenditure increased the life of the truck by 135000 miles.Record journal entries to account for:1. The purchase of the truck.2. The 2001 depreciation expense using units-of-production depreciation and assuming the truck was driven 45000 miles.3. The expenditures relating to the truck during 2002.4. The 2002 depreciation expense using the units-of-production method and assuming the truck was driven 60000 miles.

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