Im almost done. just a few I don\"t understand The following transactions, adjus
ID: 2366914 • Letter: I
Question
Im almost done. just a few I don"t understand The following transactions, adjusting entries, and closing entries were completed by Trail Creek Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. 2008 Jan 6 Purchased a used delivery truck for $24000 Paying cash Jan 19 Paid garage $500 for miscellaneous repairs to the truck Dec 31 Recorded depreciation of the truck for the year. The estimated useful life of the truck is four years, with a residual value of the truck of $4000 2009 Jan 2 Purchased a new truck for $69,000 paying cash Aug 1 Sold the used truck for $10250,(Record depreciation to date 2009 for the truck) Oct 24 Paid garage $415 for miscellaneous repairs to the truck Dec 31 Record depreciation of the new truck. The estimated residual value of $15,000 and estimated life of 5 years. 2010 July 1 Purchased a new truck for $70,000, paying cash Oct 1 Sold the truck purchased jan 2, 2009 for $25,000(record deprecation of the year) Dec 31 Record depreciation of the remaining truck. It has an estimated residual value of $18,000 and an estimated useful life of 8 years. Journalize the transactions and the adjusting entries. If an amount box does not require an entry, leave it blank.Explanation / Answer
Why cant you do these yourself?? Are you in accounting? How about this I will do 2008 and 2009, you do the rest..Remember when you sell an asset you have to bring it's book value up to date. The book value is The purchase price of the asset minus the up to date depreciation.
Jan6.
Dr. Truck 24000
Cr. Cash 24000
Jan19
Dr. Auto Repair expense 500
Cr. Cash 500
Dec31
Dr.Amortization expense12000
Cr.Accumulated Amortization12000
24000* .50
Double declining rate= 200%/4 years= .50
Year 2009
Jan 2
Dr. Truck-new 69000
Cr. Cash 69000
Aug1
Dr. Cash 10,250
Dr. Accumulated Amortization 15,500
Cr. Gain on sale 1,750
Cr. Truck-old 24,000
24000-12000(2008 depreciation)= 12000
12000*.50*7/12( Jan-July Depreciation) = 3500
12000+ 3500= 15500
Loss/gain= cash given- book value
10,250-(24000-15500) = 1750
Oct 24
Dr. Auto Repair Expense 415
Cr. Cash 415
Dec31
Dr. Amortization Exense 27600
Cr. Accumulated Amortization 27600
69000*.04= 27600
Double Declining rate= 200%/ 5 years= .40