50.1K

Verified Solution

Link Copied!

Transactions for Fixed Assets, Including Sale

The following transactions and adjusting entries were completed by Legacy 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.

Year 1
Jan. 4	Purchased a used delivery truck for $9,600, paying cash.
Nov. 2	Paid garage $130 for miscellaneous repairs to the truck.
Dec. 31	Recorded depreciation on the truck for the year. The estimated useful life of the truck is 4 years, with a residual value of $2,000 for the truck.
Year 2
Jan. 6	Purchased a new truck for $6,000, paying cash.
Apr. 1	Sold the used truck purchased on Jan. 4 of Year 1 for $3,900. (Record depreciation to date in Year 2 for the truck.)
June 11	Paid garage $410 for miscellaneous repairs to the truck.
Dec. 31	Record depreciation for the new truck. It has an estimated residual value of $1,100 and an estimated life of 5 years.
Year 3
July 1	Purchased a new truck for $79,000, paying cash.
Oct. 2	Sold the truck purchased January 6, Year 2, for $2,320. (Record depreciation to date for Year 3 for the truck.)
Dec. 31	Recorded depreciation on the remaining truck purchased on July 1. It has an estimated residual value of $14,200 and an estimated useful life of eight years.

Required:

Journalize the transactions and the adjusting entries. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations. Round your final answers to the nearest cent.

Year 1 Jan. 4	Accounts PayableAccumulated Depreciation-Delivery TruckCashDelivery TruckTruck Repair ExpenseDelivery Truck	Delivery Truck
	Accounts PayableAccumulated Depreciation-Delivery TruckCashDelivery TruckTruck Repair ExpenseCash		Cash
Nov. 2	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation ExpenseTruck Repair ExpenseTruck Repair Expense	Truck Repair Expense
	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation ExpenseTruck Repair ExpenseCash		Cash
Dec. 31	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseDelivery Truck	Delivery Truck
	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseAccumulated Depreciation-Delivery Truck		Accumulated Depreciation-Delivery Truck
Year 2 Jan. 6	Accounts PayableAccumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation ExpenseDelivery Truck	Delivery Truck
	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseCash		Cash
Apr. 1-Deprec.	Accumulated Depreciation-Delivery TruckDelivery TruckDepreciation Expense-Delivery TruckGain on Sale of Delivery TruckTruck Repair ExpenseDepreciation Expense-Delivery Truck	Depreciation Expense-Delivery Truck	blank
	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseAccumulated Depreciation-Delivery Truck		Accumulated Depreciation-Delivery Truck
Apr. 1-Sale	Accumulated Depreciation-Delivery TruckDelivery TruckDepreciation Expense-Delivery TruckGain on Sale of Delivery TruckTruck Repair ExpenseAccumulated Depreciation-Delivery Truck	Accumulated Depreciation-Delivery Truck	Accumulated Depreciation-Delivery Truck
	Accounts PayableCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseCash	Cash	Cash
	Accounts PayableDelivery TruckDepreciation Expense-Delivery TruckGain on Sale of Delivery TruckLoss on Sale of Delivery TruckLoss on Sale of Delivery Truck	Loss on Sale of Delivery Truck	Loss on Sale of Delivery Truck
	Accumulated Depreciation-Delivery TruckCashDelivery TruckGain on Sale of Delivery TruckLoss on Sale of Delivery TruckDelivery Truck	Delivery Truck	Delivery Truck
June 11	Accumulated Depreciation-Delivery TruckDelivery TruckDepreciation Expense-Delivery TruckGain on Sale of Delivery TruckTruck Repair ExpenseTruck Repair Expense	Truck Repair Expense	Truck Repair Expense
	Accounts PayableCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseCash	Cash	Cash
Dec. 31	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseDepreciation Expense-Delivery Truck	Depreciation Expense-Delivery Truck
	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseAccumulated Depreciation-Delivery Truck		Accumulated Depreciation-Delivery Truck
Year 3 July 1	Accounts PayableAccumulated Depreciation-Delivery TruckCashDelivery TruckTruck Repair ExpenseDelivery Truck	Delivery Truck
	Accounts PayableAccumulated Depreciation-Delivery TruckCashDelivery TruckTruck Repair ExpenseCash		Cash
Oct. 2-Deprec.	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseDepreciation Expense-Delivery Truck	Depreciation Expense-Delivery Truck
	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseAccumulated Depreciation-Delivery Truck		Accumulated Depreciation-Delivery Truck
Oct. 2-Sale	CashDelivery TruckDepreciation Expense-Delivery TruckGain on Sale of Delivery TruckLoss on Sale of Delivery TruckCash	Cash	Cash
	Accounts PayableAccumulated Depreciation-Delivery TruckDelivery TruckDepreciation Expense-Delivery TruckLoss on Sale of Delivery TruckAccumulated Depreciation-Delivery Truck	Accumulated Depreciation-Delivery Truck	Accumulated Depreciation-Delivery Truck
	Accounts PayableAccumulated Depreciation-Delivery TruckDelivery TruckDepreciation Expense-Delivery TruckLoss on Sale of Delivery TruckLoss on Sale of Delivery Truck	Loss on Sale of Delivery Truck	Loss on Sale of Delivery Truck
	Accounts PayableAccumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation Expense-Delivery TruckDelivery Truck	Delivery Truck	Delivery Truck
Dec. 31	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseDepreciation Expense-Delivery Truck	Depreciation Expense-Delivery Truck
	Accumulated Depreciation-Delivery TruckCashDelivery TruckDepreciation Expense-Delivery TruckTruck Repair ExpenseAccumulated Depreciation-Delivery Truck		Accumulated Depreciation-Delivery Truck

Answer & Explanation Solved by verified expert

See Answer