Exercise 9-9 Presented below are selected transactions at Ridge Company for 2017

Question

Exercise 9-9

Presented below are selected transactions at Ridge Company for 2017.

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ridge Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2016.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Do not round intermediate calculations.)

Date

Account Titles and Explanation

Debit

Credit

(To record depreciation to date of disposal)

June 30

(To record sale of computer)

(To record depreciation to date of disposal)

Dec. 31

(To record retirement of truck)

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2007. The machine cost $64,600 on that date. It had a useful life of 10 years with no salvage value. June 30 Sold a computer that was purchased on January 1, 2014. The computer cost $34,200. It had a useful life of 5 years with no salvage value. The computer was sold for $14,400. Dec. 31 Discarded a delivery truck that was purchased on January 1, 2013. The truck cost $41,880. It was depreciated based on a 6-year useful life with a $3,000 salvage value.

Explanation / Answer

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ridge Company uses straight-line depreciation

(To record depreciation to date of disposal)

Date accounts & explanation debit credit Jan 1 Accumlated depreciation 64600      Machinery 64600 June 30 Depreciation expense (34200/5)*6/12 3420      Accumlated depreciation-computer 3420

(To record depreciation to date of disposal)

June 30 Cash 14400 Accumlated depreciation-computer (34200/5*3.5) 23940        Gain on sale of computer 4140       Computer 34200 (To record sale of computer) Dec 31 Depreciation expense (41880-3000/6) 6480     Accumlated depreciation-delivery truck 6480 (To record depreciation to date of disposal) Dec 31 Accumlated depreciation-delivery truck (6480*5) 32400 Loss on discard 9480     Delivery truck 41880 (To record retirement of truck)

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