The following transactions, adjusting entries, and closing entries were complete
ID: 2497566 • Letter: T
Question
The following transactions, adjusting entries, and closing 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. 2014 Jan. 4. Purchased a used delivery truck for $28,000, paying cash. Nov. 2. Paid garage $675 for miscellaneous repairs to the truck. Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $5,000 for the truck. 2015 Jan. 6. Purchased a new truck for $48,000, paying cash. Apr. 1. Sold the used truck for $15,000. (Record depreciation to date in 2015 for the truck.) June 11. Paid garage $450 for miscellaneous repairs to the truck. Dec. 31. Record depreciation for the new truck. It has an estimated residual value of $9,000 and an estimated life of five years. 2016 July 1. Purchased a new truck for $54,000, paying cash. Oct. 2. Sold the truck purchased January 6, 2015, for $16,750. (Record depreciation to date for 2016 for the truck.) Dec. 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $12,000 and an estimated useful life of eight years. Journalize the transactions and the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles. Be sure to include the YEAR in the date for the FIRST transaction on each page.
Explanation / Answer
Workings:
Date Account Title Debit Credit Jan 4 2014 Delivery Truck 1 28,000 Cash 28,000 Nov 2 2014 Repairs 675 Cash 675 December 31 2014 Depreciation expense 14,000 Delivery Truck 1 14,000 Jan 6 2015 Delivery Truck 2 48,000 Cash 48,000 April 1 2015 Depreciation Expense 1750 Delivery Truck 1 1750 Cash 15,000 Delivery Truck 1 12,250 Gain on sale of Truck 1 2,750 June 11 2015 Repairs 450 Cash 450 December 31 2015 Depreciation expense 19,200 Delivery Truck 2 19,200 July 1 2016 Delivery Truck 3 54,000 Cash 54,000 Oct 2 2016 Depreciation expense 8,640 Delivery Truck 2 8.640 Oct 2 2016 Cash 16,750 Loss on sale of Delivery Truck 3,410 To Delivery Truck 2 20,160 December 31 2016 Depreciation expense 6,750 Delivery Truck 3 6,750Related Questions
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