nt>Open Assignment ENT RESOURCES Sunland Company had the following assets on Jan
ID: 2513432 • Letter: N
Question
nt>Open Assignment ENT RESOURCES Sunland Company had the following assets on January 1, 2017. sercise 9.14 Useful Life Item 10 s 0 Machinery $79,520 33,600 37,408 Jan. 1, 2007 Jan. 1, 2014 Jan. i, 2012 3,360 machinery was retired on January 1·The forklift was sold on June 30 for $13,440. The truck was During 2017, each of the assets was remaved from service. The discarded on December 31 Journalize 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 O for the amounts.) June 30 /7/2018 Type here to searchExplanation / Answer
Solution:
Date
General Journal
Debit
Credit
Jan.1, 2017
Accumulated Depreciation - Machinery
$79,520
Machinery
$79,520
(Retirement of Machinery)
June.30, 2017
Depreciation Expense
$3,360
Accumulated Depreciation - Forklift
$3,360
(Depreciation for 6 month = $33,600 / 5 * 6/12)
(To record depreciation expense on forklift)
June.30, 2017
Cash
$13,440
Accumulated Depreciation - Forklift (Refer Note 1)
$23,520
Forklift
$33,600
Gain on Sale of Asset (Bal fig)
$3,360
(To record sale of forklift)
Dec.31, 2017
Depreciation Expense
$4,256
Accumulated Depreciation - Truck (37,408 - 3360)/8
$4,256
(To record depreciation expense on truck)
Dec.31, 2017
Accumulated Depreciation - Truck ($4,256*6yrs)
$25,536
Loss on disposition of Truck (bal fig)
$11,872
Truck
$37,408
Note 1 – Accumulated Depreciation on Forklift as on June 30, 2017
Purchase Date Jan.1, 2014
Annual Depreciation = (Cost of Asset – Salvage Value) / Useful life
= (33,600 – 0) / 5
= $6,720
Accumulated Depreciation for 3 years (Jan 1, 14 to Dec 31, 2016) = $6,720*3 = $20,160
Accumulated Depreciation balance on June 30, 2017 = $20,160 + $3,360 = $23,520
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Date
General Journal
Debit
Credit
Jan.1, 2017
Accumulated Depreciation - Machinery
$79,520
Machinery
$79,520
(Retirement of Machinery)
June.30, 2017
Depreciation Expense
$3,360
Accumulated Depreciation - Forklift
$3,360
(Depreciation for 6 month = $33,600 / 5 * 6/12)
(To record depreciation expense on forklift)
June.30, 2017
Cash
$13,440
Accumulated Depreciation - Forklift (Refer Note 1)
$23,520
Forklift
$33,600
Gain on Sale of Asset (Bal fig)
$3,360
(To record sale of forklift)
Dec.31, 2017
Depreciation Expense
$4,256
Accumulated Depreciation - Truck (37,408 - 3360)/8
$4,256
(To record depreciation expense on truck)
Dec.31, 2017
Accumulated Depreciation - Truck ($4,256*6yrs)
$25,536
Loss on disposition of Truck (bal fig)
$11,872
Truck
$37,408
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