Presented here are selected transactions for Pine Company for 2014. Discarded a
ID: 2487264 • Letter: P
Question
Presented here are selected transactions for Pine Company for 2014.
Discarded a delivery truck that was purchased on January 1, 2009. The truck cost $56,000 and was depreciated based on an 8-year useful life with a $4,900 salvage value.
Date
Account Titles and Explanation
Debit
Credit
(To record depreciation on computer sold)
(To record depreciation on truck sold)
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Jan. 1 Retired a piece of machinery that was purchased on January 1, 2004. The machine cost $75,000 on that date and had a useful life of 10 years with no salvage value. June 30 Sold a computer that was purchased on January 1, 2011. The computer cost $27,600 and had a useful life of 5 years with no salvage value. The computer was sold for $11,040. Dec. 31
Discarded a delivery truck that was purchased on January 1, 2009. The truck cost $56,000 and was depreciated based on an 8-year useful life with a $4,900 salvage value.
Explanation / Answer
Jan 1: Retirement
Dr: Accumulated Depreciation $ 75 000
Cr: Machinery $75 000
June 30: Depreciation of Equipment
Dr: Depreciation Expense $2500
Cr: Accumulated Depreciation $ 2500
June 30: Sale of Computer
Dr: Cash $11040
Dr: Accumulated Depreciation 21 600
Cr. Machinery $ 27600
Cr: Gain on Sale of Computer 5040
Dec 31:
Record Depreciation
Dr: Depreciation Expense 2500
Cr: Accumulated Depreciation 2 500
Disposal of Truck
Dr: Loss on disposal 6075
Dr: Accumulated Depreciation 49925
Cr: Truck $56000