Bookmarks ESCI 111 Quiz 10 apter 9 HWw Question 14 (of 14) 0.60 points PA9-4 Rec

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Bookmarks ESCI 111 Quiz 10 apter 9 HWw Question 14 (of 14) 0.60 points PA9-4 Recording Transactions and Adjustments for Tangible and Intangible Assets [LC 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 January January 2,2015 3, 2015 Paid $96,000 cash to purchase storage shed components Paid $6,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $9,000 Apil1,2015 Paid $42,000 cash to purchase a pickup truck for use in the business. The truck has May 13, 2015 Paid $600 cash for repairs to the pickup truck December 31.2015 Recorded depreciation and amortization on the pickup truck, storage shed, and an estimated usefull life of five years and a residual value of $7,000. ,2015 Paid $19,000 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 patent June 30,2016 Sold the pickup truck for $36,000 cash. (Record the depreciation on the truck prior December 31,2016 Recorded depreciation on the storage shed. Determined that the patent was recording its disposal.) impaired and wrote off its remaining book value (i.e, wrote down the book value to zero) Required: Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) View transaction list FI F5

Explanation / Answer

Journal Entries :-

Date Particulars Debit ($) Credit ($) Jan. 2, 2015 Shed 96000 To Cash 96000 Jan. 3, 2015 Shed 6000 To Cash 6000 Apr. 1, 2015 Vehicles 42000 To Cash 42000 May 1, 2015 Repairs and Maintenance Expense 600 To Cash 600 Jul. 1, 2015 Patents 19000 To Cash 19000 Dec 31, 2015 Depreciation Exp. ((42000 - 7000)/5)*(9/12) 5250 To Accumulated Depreciation(Truck) 5250 Depreciation Exp.(102000 - 0)*(2/10) 20400 To Accumulated Depreciation(Shed) 20400 Amortization Exp. (19000/5)*(6/12) 1900 To Patents 1900 Jun 30 2016 Depreciation Exp.((42000 - 7000)/5)*(6/12) 3500 To Accumulated Depreciation(Truck) 3500 Cash 36000 Accumulated Depreciation(5250 + 3500) 8750 To Truck 42000 To Gain on Disposal of truck 2750 Dec 31, 2016 Depreciation Expense ((102000-20400)* 2/10) 16320 To Accumulated Depreciation (Shed) 16320 Impairment Loss (19000 - 1900) 17100 To Patents 17100

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