Question 5 Sheridan Company had the following assets on January 1, 2017. During

Question

Question 5

Sheridan Company had the following assets on January 1, 2017.

During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $13,200. The truck was discarded on December 31.

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2016. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit

June 30

Dec. 31

List Of Accounts

Close

Question 5

Item Cost Purchase Date Useful Life
(in years) Salvage Value Machinery $78,100 Jan. 1, 2007 10 $ 0 Forklift 33,000 Jan. 1, 2014 5 0 Truck 36,744 Jan. 1, 2012 8 3,304

Explanation / Answer

Journal entry :

Date account & explanation debit credit Jan 1 Accumlated depreciation-Machinery 78100 Machinery 78100 (To record machine retired) June 30 Depreciation expense (33000/5)*6/12 3300 Accumlated depreciation-Forklift 3300 (To record depreciation expense) June 30 Cash 13200 Accumlated depreciation-Forklift 23100 Gain on sale of forklift 3300 Forklift 33000 (To record Sale of forklift) Dec 31 Depreciation expense (36744-3304/8) 4180 Accumlated depreciation-Truck 4180 (To record depreciation expense) Dec 31 Accumlated depreciation-Truck (4180*6) 25080 Loss on discard of truck 11664 Truck 36744 (To record discard of truck)

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