The following transactions and adjusting entries were completed by a paper-packa
ID: 2551281 • Letter: T
Question
The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2015 and 2016. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents.
The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2015 and 2016. The company uses straight-ine depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents. 2, 2015 3, 2015 Paid $97,000 cash to purchase storage shed components. Paid $4,000 cash to have the storage shed erected. The storage shed has an January January Apri1, 2015 Paid $43,000 cash to purchase a pickup truck for use in the business. The truck has May estimated life of 10 years and a residual value of $7,000 an estimated useful life of five years and a residual value of $5,000 Paid $700 cash for repairs to the pickup truck. Paid $18,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years Recorded depreciation and amortization on the pickup truck, storage shed, and 13, 2015 1, 2015 July December 31, 2015 June 30, 2016 December 31, 2016 Sold the pickup truck for $37,000 cash. (Record the depreciation on the truck pric to recording its disposal.) Recorded depreciation on the storage shed. Determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to Required: Prepare the journal entries required on each of the above dates. (lf no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) General Journal Debit Credit January 02, Buildings 97,000 o Cash 97,000 January03. Buildings 4,000 2015 Cash 4,000 3 April 01, 2015 Equipment 43,000 43,000 May 13, 2015 Repairs and Maintenance Expense 700 01 18,000 18,000 25,900 1,800 Amortization Expense Accumulated Depreciation-Building Accumulated Depreciation-Equipment Accumulated Amortization-Patent 20,200 5,700 1,800 7 June 30 2016 3,800 Depreciation Expense Accumulated Depreciation-Equipment ,800 June 30 2016 Accumulated Depreciation-Equipment 8,000 Equipment Gain on Disposal 43,000 2,000 Depreciation Expense Loss on Disposal Accumulated Depreciation-Building 2016Explanation / Answer
Journal entries Date Accounts title and explanations Debit $ Credit $ Jan 2 2015 Building Dr. 97000 Cash 97000 3-Jan Building Dr. 4000 cash Account 4000 1-Apr Equipment Dr. 43000 Cash 43000 13-May Repairs and maintenance Dr. 700 Cash 700 1-Jul Patents rights Dr. 18000 Cash Account 18000 31-Dec Depreciation expense Dr. 25900 Amortization expense Dr. 1800 Accumulated Depreciation-Building 20200 Accumulated Depreciation-Equipment 5700 Accumulated Amortization-Ppatent 1800 30-Jun Depreciation expense Dr. 3800 Acumulated depreciation-Equipment 3800 30-Jun Cash Account 37000 Accumulated depreciation 9500 Equipment 43000 Gain on sale of equipment 3500 31-Dec Depreciation Expense Dr. 16160 Amortization expense Dr. 3600 Accumulated dep-Building 16160 Accumulated Amortization-Patents 3600
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