Problem 9-3A Blossum Company had the following assets on Jauary 1, 2017 Usetul L

Question

Problem 9-3A Blossum Company had the following assets on Jauary 1, 2017 Usetul Lite Item Machinery Forkdift Truck Cast Purchase Date in years) Salage Valuc 35,200 Jan. 1, 2007 36,000 Jan. 1, 2014 0,080 a 1, 2012 10 3,600 During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on )une 30 for s14, 400·The truck was discarded on December 31. Journalize all entries required on the above dates, indluding 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.) Date Account Titles and Explanation Debit Credit on 1 Depreciation-Equipment Expenae To record deprecdation expense on forkdift une 30 Depreciatian-Equipment To record sale of forklift) To record depreciation expense on truck Dec. 31 (To record sale of truck)

Explanation / Answer

Journal entry :

date accounts & explanation debit credit 2017 Jan 1 Accumlated depreciation a/c 85200       Machine a/c 85200 (TO record machine retired) 2017 June 30 Depreciation expenses a/c-Forklift (36000/5)/2 3600      Accumlated depreciation-Forklift a/c 3600 (To record depreciation update) 2017 June 30 Cash a/c 14400 Accumlated depreciation- Forklift (36000/5)*3.5 25200       Gain on sale of forklift 3600       Forklift a/c 36000 (To record Forklift sold) 2017 dec 31 Depreciation expenses a/c-Truck (40080-3600)/8 4560      Accumlated depreciation -Truck a/c 4560 (To record depreciation update) 2017 dec 31 Accumlated depreciation-Truck (4560*6) 27360 Loss on discarded 12720         Truck a/c 40080 (To record discard of truck)

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