all Verizon 12:47 PM The following transactions and adjusting entries were compl
ID: 2568344 • Letter: A
Question
all Verizon 12:47 PM The following transactions and adjusting entries were completed by a local delivery company called Fast Delivery. The company uses straight-line depreciation for delivery vehicles, double-declining balance depreciation for buildings, and straight-line amortization for nuay 2.205 Paid $165,000 cash to purchase a small warehouse building near the airport. The building has an estimated life of 20 years and a residual value of 1.2 Paid $43,000 cash to purchase a delivery van. The van has an estimated useful le of five years and a cober 2.30 Paid $500 cash to paint a small office in the 2015 Paid $100 cash to get the oil changed in the delivery " r1,20 Paid $105,000 cash to UPS to begin operating Fast Delivery business as a franchise using the name The UPS Store. This franchise right expires in five years n 3 a Recorded depreciation and amortization on the 2s Sold the warehouse building for $132,000 cash. 1, 3Recorded depreciation on the delivery van and delivery van, warehouse building, and franchise right Record the depreciation on the building prior to recording its disposal) amortization on the franchise right. Determined that the franchise right was not impaired in value. 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.) Journal entry worksheet Recard the purchase of a warehouse building for 8165,000 cExplanation / Answer
JOURNAL
Date
General Journal
Debit
Credit
Jan. 2, 2015
Building
165000
Cash
165000
(Purchase of Building for cash)
July. 1,2015
Delivery van
43000
Cash
43000
(Purchase of Delivery Van for cash)
Oct. 2, 2015
Maintenance and repair expense
500
Cash
500
(Paid for painting of stores Building)
Oct. 13, 2015
Maintenance and repair expense
100
Cash
100
(Paid for oil change of delivery van)
Dec. 1, 2015
Franchise rights
105000
Cash
105000
(Purchase of Franchise rights for cash)
Dec. 31, 2015
Depreciation Expense
16500
Accumulated Depreciation - Building
16500
(Being depreciation on Building for one year)
Calculation:
Cost of Building
165000
Estimated life
20
years
Depreciation rate on straight line
5%
(100/20)
Depreciation rate on Double declining method
10%
Depreciation for the year
16500
= 165,000 x 10%
Dec. 31, 2015
Depreciation Expense
3440
Accumulated Depreciation - Delivery van
3440
(Being depreciation on Delivery van for half year)
Calculation:
Cost of Delivery van
43000
Less: Residual value
8600
Depreciable cost
34400
Estimated life
5
years
Depreciation rate on straight line
20%
(100/5)
Depreciation for half year
3440
(34,400 x 20% / 2)
Dec. 31, 2015
Amortization Expense
Franchise rights
(Being amortization of franchise rights for one month)
Calculation:
Cost of Franchise rights
105000
Estimated life
5
years
Amortization rate on straight line
20%
(100/5)
Amortization for one month
1750
(105,000 x 20% / 2)
June 30, 2016
Depreciation Expense
7425
Accumulated Depreciation - Building
7425
(Being depreciation on Building for half year)
Calculation:
Cost of Building
165000
Less: accum. Depreciation
16500
Book Value - Beginning
148500
Estimated life
20
years
Depreciation rate on straight line
5%
(100/20)
Depreciation rate on Double declining method
10%
Depreciation for the year
7425
= 148,500 x 10% /2
June 30, 2016
Cash
132000
Accumulated depreciation - Building
23925
Loss on sale of Building
9075
Building
165000
(Being sale of Building)
Dec. 31, 2016
Depreciation Expense
6880
Accumulated Depreciation - Delivery van
6880
(Being depreciation on Delivery van for half year)
Calculation:
Cost of Delivery van
43000
Less: Residual value
8600
Depreciable cost
34400
Estimated life
5
years
Depreciation rate on straight line
20%
(100/5)
Depreciation for one year
6880
(34,400 x 20%)
Amortization Expense
Franchise rights
(Being amortization of franchise rights for one month)
Calculation:
Cost of Franchise rights
105000
Estimated life
5
years
Amortization rate on straight line
20%
(100/5)
Amortization for one month
21000
(105,000 x 20%)
JOURNAL
Date
General Journal
Debit
Credit
Jan. 2, 2015
Building
165000
Cash
165000
(Purchase of Building for cash)
July. 1,2015
Delivery van
43000
Cash
43000
(Purchase of Delivery Van for cash)
Oct. 2, 2015
Maintenance and repair expense
500
Cash
500
(Paid for painting of stores Building)
Oct. 13, 2015
Maintenance and repair expense
100
Cash
100
(Paid for oil change of delivery van)
Dec. 1, 2015
Franchise rights
105000
Cash
105000
(Purchase of Franchise rights for cash)
Dec. 31, 2015
Depreciation Expense
16500
Accumulated Depreciation - Building
16500
(Being depreciation on Building for one year)
Calculation:
Cost of Building
165000
Estimated life
20
years
Depreciation rate on straight line
5%
(100/20)
Depreciation rate on Double declining method
10%
Depreciation for the year
16500
= 165,000 x 10%
Dec. 31, 2015
Depreciation Expense
3440
Accumulated Depreciation - Delivery van
3440
(Being depreciation on Delivery van for half year)
Calculation:
Cost of Delivery van
43000
Less: Residual value
8600
Depreciable cost
34400
Estimated life
5
years
Depreciation rate on straight line
20%
(100/5)
Depreciation for half year
3440
(34,400 x 20% / 2)
Dec. 31, 2015
Amortization Expense
Franchise rights
(Being amortization of franchise rights for one month)
Calculation:
Cost of Franchise rights
105000
Estimated life
5
years
Amortization rate on straight line
20%
(100/5)
Amortization for one month
1750
(105,000 x 20% / 2)
June 30, 2016
Depreciation Expense
7425
Accumulated Depreciation - Building
7425
(Being depreciation on Building for half year)
Calculation:
Cost of Building
165000
Less: accum. Depreciation
16500
Book Value - Beginning
148500
Estimated life
20
years
Depreciation rate on straight line
5%
(100/20)
Depreciation rate on Double declining method
10%
Depreciation for the year
7425
= 148,500 x 10% /2
June 30, 2016
Cash
132000
Accumulated depreciation - Building
23925
Loss on sale of Building
9075
Building
165000
(Being sale of Building)
Dec. 31, 2016
Depreciation Expense
6880
Accumulated Depreciation - Delivery van
6880
(Being depreciation on Delivery van for half year)
Calculation:
Cost of Delivery van
43000
Less: Residual value
8600
Depreciable cost
34400
Estimated life
5
years
Depreciation rate on straight line
20%
(100/5)
Depreciation for one year
6880
(34,400 x 20%)
Amortization Expense
Franchise rights
(Being amortization of franchise rights for one month)
Calculation:
Cost of Franchise rights
105000
Estimated life
5
years
Amortization rate on straight line
20%
(100/5)
Amortization for one month
21000
(105,000 x 20%)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.