..ooo T-Mobile 9:36 PM ezto.mheducation.com 10.00 peits PA9 4 Recording Transact

Question

..ooo T-Mobile 9:36 PM ezto.mheducation.com 10.00 peits PA9 4 Recording Transactions and Adjustments for Tangible and Intangible Assets [LO 9-1, LO 9 2 LO 9-3, LO 9.4, LO 9-5, LO 9-6] The follkwing transactions and acjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2015 and 2015. The company uses straight-lina depreciaion for trucks and other vehicles, d and straight-ine amartizatian for patents depreciaton for buildings, aney 22015 Paid $90,000 cash to purchase sterage shed Jorwery 2015 Paid $5,000 cash to have the storage shed erected. The or Paid $33,000 cash to purchase a pickup truck for use in storage shed has an estimated life of 10 years and a residual value of $8,000 the business The truck has an estimated useful life c five years and a residual value of $8,000 3 20Paid $100 cash for repairs to the pickup tnuck Paid $25,000 cash to purchase petent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years December 31, 2Reoorded depreciation and amortization on the pickup Are ya ans Sold the pickup truck for $28,000 cash. (Record the Daienter 31, aRecorded depreciation on the storage shed. Determined truck, storage shed, and patent depreciation on the truck prior to recording its disposal.) that the patent was impaired and wrote cff its remaining book value ie, wote down the bock value to zero) Required: Prepare the joumal entries required on each of the above dates. If no entry is required for a transactionievent, select "No Journal Entry Required in the first account ield. Do not round intermediate calculations.) 5y 01,2015 June30, 2016 Cash

Explanation / Answer

Jan 2 2015 Building / Shed              90,000 Cash           90,000 Jan 3 2015 Building / Shed                 5,000 Cash              5,000 Apr 1 2015 Vehicle / Truck              33,000 Cash           33,000 May 13 2015 Repair and Maintenance Expenses                    100 Cash                 100 July 1 2015 Patent              25,000 Cash           25,000 Dec 31 2015 Depreciation                 4,050 Accumulated Depreciation-Truck              4,050 (4,050 = (33,000-6,000)/5 = 5,400 per year x 9/12) Dec 31 2015 Depreciation                 8,700 Accumulated Depreciation-Shed              8,700 (8,700 = (95,000 – 8000)/10 ) Dec 31 2015 Amortisation                 2,500 Patent              2,500 (2,500 = (25,000/5 x 6/12) June 30, 2016 Depreciation                 2,700 Accumulated Depreciation-Truck              2,700 (2,700 = 5,400 per year (see Dec 2009 AJE) x 6/12) Cash              28,000 Accumulated Depreciation-Truck                 6,750    Truck           33,000    Gain on Disposal              1,750 Dec 31 2016 Depreciation                 8,700 Accumulated Depreciation-Shed              8,700 (8,700 = (95,000 – 8000)/10 ) Dec 31 2016 Impairment Loss              22,500 Patent           22,500

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