Question #3:--430 arks) Whyte Company purchased a forklift for cash, on January

Question

Question #3:--430 arks) Whyte Company purchased a forklift for cash, on January 1, 2015 for $35,000. The estimated life of the Asset is 5 years. Required: (a) Prepare the Journal Entry to record the purchase of the forklift. (b) Prepare the adjusting Journal Entries to record depreciation expense, on each of the years at December 31, 2015, 2016, 2017 using Declining Balance Depreciation December 31,2015-2017 using Straight- line Depreciation. Depreciation from above, at December 31,2017, for S20,000. (c) Prepare the adjusting entry to record depreciation expense, on each of the years at (d) Prepare the journal entries to record the disposal of the Forklift, using both methods of

Explanation / Answer

Date Accounts Title Dr Cr a Forklift $35,000 Cash $35,000 b) Dec 31 2015 Depreciation expenses $14,000 Accumulated Depreciation-Forklift $14,000 (35000*40%) DDB rate=1/5*200%=40% Dec 31 2016 Depreciation expenses 8400 Accumulated Depreciation-Forklift $8,400 (35000-14000)*40% Dec 31 2017 Depreciation expenses 5040 Accumulated Depreciation-Forklift $5,040 (35000-14000-8400)*40% c) Dec 31 2015 Depreciation expenses $7,000 Accumulated Depreciation-Forklift $7,000 (35000/5) Dec 31 2016 Depreciation expenses $7,000 Accumulated Depreciation-Forklift $7,000 (35000/5) Dec 31 2017 Depreciation expenses $7,000 Accumulated Depreciation-Forklift $7,000 (35000/5) Dec 31 2017 Cash 20000 Accumulated Depreciation-Forklift $27,440 Gain on sale of Forklift 12440 Forklift 35000 SLM Cash 20000 Accumulated Depreciation-Forklift 21000 Gain on sale of Forklift 6000 Forklift 35000

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