Accounting for Long-Term Assets Company B is its business. Instructions: Record

Question

Accounting for Long-Term Assets Company B is its business. Instructions: Record each of the following equipment transactions for 2017 a calendar-year corporation that purchases and sales equipment for use in May 9: Company B sold a concrete truck for $3,400. The original cost of the concrete truck was $7.000, with accumulated depreciation of $4,300 at the time of the sale. Record the sale of the concrete truck for cash Date a. Account Titles Debit Credit July 13: Company B purchased a new fork lift for $11,000 plus sales tax of $3,300 he company signed a note for $5,000 and paid the remaining balanced owed for the equipment in cash. Record the purchase of the new fork lift Date Debit Credit Account Titles July 13: Company B sold a cable reel trailer that originally cost $5.750, with accumulated depreciation of $2.300 at the time of the sale. Record the sale of the cable reel trailer for $3,350 cash. Date c. Debit Credit Account Titles December 31: Company B uses the straight-line depreciation method to calculate its depreciation expense on its equipment. For 2017 depreciation expense was $24,750 Date d. Record depreciation expense Credit Debit Account Titles

Explanation / Answer

a. Date Account Title Debit Credit 9-May-17 Cash          3,400 Accumulated Depreciation          4,300 Concrete Truck (Fixed Assets)          7,000 Gain on Sale of Concrete Truck (Bal. Fig.)             700 b. Date Account Title Debit Credit 13-Jul-17 Forklift (Fixed Assets)       11,000 Sales Tax Receivable          3,300 Notes Payable          5,000 Vendor Payable          9,300 Assumed: input Sales tax can be set off against output sales tax and hence not capitalised c. Date Account Title Debit Credit 13-Jul-17 Cash          3,350 Accumulated Depreciation          2,300 Loss on Sale of Cable Reel (Bal. Fig)             100 Cable Reel (Fixed Assets)          5,750 d. Date Account Title Debit Credit 31-Dec-17 Depreciation       24,750 Accumulated Depreciation       24,750

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