Course: NUT4553-101-M X?e The Following Transactic ?e Accounting question C ×? C
ID: 2400442 • Letter: C
Question
Course: NUT4553-101-M X?e The Following Transactic ?e Accounting question C ×? Ch9Hw xC Grid Iron Prep Inc. (GIP x Cezto.mheducation.com/hm.tpx Question 3 (of 4) e& Exit 3. 25.00 points You did not receive full credit for this question in a previous attempt PB9-4 Recording Transactions and Adjustments for Tangible and Intangible Assets [LO 9-1, LO 9-2, LO 9-3, LO 9-4, LO 9-5, LO 9-6] The following transactions and adjusting entries were completed by a local delivery company called Fast Delivery. The company uses straight-line depreciation for delivery vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for franchise rights. Paid $180,000 cash to purchase a small warehouse building near the airport. The building has an estimated life of 20 years and a residual value of S3,500 Paid $48,000 cash to purchase a delivery van. The van has an estimated useful life of five years and a residual value of $9,600 January 2, 2015 July 1, 2015 October 2, 2015 Paid $500 cash to paint a small office in the warehouse building October 13, 2015 Paid $250 cash to get the oil changed in the delivery van. December 1, 2015 Paid $82,500 cash to UPS to begin operating Fast Delivery business as a franchise December 31, 2015 Recorded depreciation and amortization on the delivery van, warehouse building. June 30, 2016 Sold the warehouse building for $144,000 cash. (Record the depreciation on the December 31, 2016 Recorded depreciation on the delivery van and amortization on the franchise right. using the name The UPS Store. This franchise right expires in five years and franchise right. building prior to recording its disposal.) Determined that the franchise right was not impaired in value Required: Prepare the journal entries required on each of the above dates. [If no entry is required for a transactionlevent, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) View transaction list View journal entry worksheet O Type here to search 5:26 PM 7/9/2018Explanation / Answer
Solution:
Journal Entries - Fast delivery Date Particulars Debit Credit 2-Jan-15 Building Dr $180,000.00 To Cash $180,000.00 (To record purchase of warehouse building) 1-Jul-15 Deliver Van Dr $48,000.00 To Cash $48,000.00 (To record purchase of truck) 2-Oct-15 Repair & Maintenance expense Dr $500.00 To Cash $500.00 (To record expense for paint in warehouse) 13-Oct-15 Repair & Maintenance expense Dr $250.00 To Cash $250.00 (To record oil change of delivery van) 1-Dec-15 Franchise Rights Dr $82,500.00 To Cash $82,500.00 (To record purchase of Franchise rights) 31-Dec-15 Deprecation expense Dr $21,840.00 Amortization expense Dr $1,375.00 To Accumulated depreciation - Delivery Van [($48,000-$9,600)/5*6/12] $3,840.00 To Accumulated depreciation - Building ($180,000*10%) $18,000.00 To Accumulated Amortization - Franchise rights ($82,500/5*1/12) $1,375.00 (To record depreciation on delivery VAN, building and Franchise rights) 30-Jun-16 Deprecation expense Dr $8,100.00 To Accumulated depreciation - Building [$162,000*10%*6/12] $8,100.00 (To record depreciation upto date of sale) 30-Jun-16 Cash Dr $144,000.00 Accumulated depreciation - Building Dr $26,100.00 Loss on sales of assets Dr $9,900.00 To Building $180,000.00 (To record sales of Warehouse) 31-Dec-16 Deprecation expense Dr $7,680.00 To Accumulated depreciation - Delivery VAN [($48,000-$9,600)/5] $7,680.00 (To record depreciation on storage shed) 31-Dec-19 Amortization expense Dr $16,500.00 To Accumulated Amortization - Franchise rights ($17,000/5) $16,500.00 (To record amortization expense on Franchise rights)