Help prepare all necessary journal entries to record the following transactions

Question

Help prepare all necessary journal entries to record the following transactions in 2012 for Megan's Molting. I really am confused as to which accounts these transactions get debited/credited.

May 1

Discrded old store equipment that originally cost $66,000 and had a book value of $18,000 on date of disposal. Assume depreciation on the equipment has already been recorded for the current year.

June 30

Sold a delivery truck for $11,000. The delivery truck originally cost $77,000 and had accumulated depreciation of $68,000 on the date of sale. Assume the depreciation of the truck has already been recorded to date.

Dec 31

Equipment with a 6-year useful life was purchasedo n Jan 1, 2010, for $62,000 and was sold for $12,000 in 2012. The equipment had been depreciated using the straight-line method with an estimated salvage value of zero. Depreciation expense was alreadt recorded through Dec 31, 2012.

Explanation / Answer

Hi.

Please find the journal entries as follows:

May 1

Loss on Disposal Dr. 18000

Accumulated Depreciation - Store Equipment Dr. (66000 - 18000) 48000

Store Equipment Cr. 66000

June 30

Cash Dr. 11000

Accumulated Depreciation - Delivery Truck Dr. 68000

Gain on Disposal Cr. (11000 - 9000) 2000

Delivery Truck Cr. 77000

Dec 31

Cash Dr. 12000

Accumulated Depreciation Dr. (62000/6*3) 31000

Loss on Disposal Dr. (62000 - 12000 - 31000) 19000

Equipment Cr. 62000

Thanks.

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