Problem 9-3A Cullumber Company had the following assets on January 1, 2017. Usef

Question

Problem 9-3A Cullumber Company had the following assets on January 1, 2017. Useful Life Item Cost Purchase Date (in years) Salvage Value Machinery $72,420 Jan. 1, 2007 $0 t 3,064 10 Forkift 30,600 Jan. 1, 2014 Truck 34,072 Jan. 1, 2012 8 During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $12,240. The truck was discarded on December 31 Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line 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.)

Explanation / Answer

Jan-01 Accumulated depreciation - equipment ($72,420/10*10) $ 72,420 Equipment $ 72,420 (To record discard equipment) Jun-30 Depreciation expense ($30,600/5*6/12) $    3,060 Accumulated depreciation - equipment $    3,060 (To record depreciation expense on forklift) Jun-30 Cash $ 12,240 Accumulated depreciation ($30,600/5*3)+$3,060) $ 21,420 Forklift $ 30,600 Gain on sale of assets $    3,060 (To record sale of forklift) Dec-31 Depreciation expense (($34,072-$3,064)/8) $    3,876 Accumulated depreciation - Truck $    3,876 (To record depreciation expense on truck) Dec-31 Accumulated depreciation - Truck (($34,072-$3,064)/8*6) $ 23,256 Loss on disposal of assets $ 10,816 Truck $ 34,072

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