Exercise 9-8 Here are selected 2017 transactions of Akron Corporation Jan. 1 Ret

Question

Exercise 9-8 Here are selected 2017 transactions of Akron Corporation Jan. 1 Retired a piece of machinery that was purchased on January 1, 2007. The machine cost $62,000 and had a useful life of 10 years with no salvage value. June 30 Sold a computer that was purchased on January 1, 2015. The computer cost36,000 and had a useful life of 3 years with no salvage value. The computer was sold for $5,000 cash. Dec. 31 Sold a delivery truck for $9,000 cash. The truck cost $25,000 when it was purchased on January 1, 2014, and was depreciated based on a 5-year useful life with a $4,000 salvage value ournalize all entries required on the above dates, incduding entries to update depreciation on assets disposed of, where applicable. Akron Corporation uses straight-line depreciation. (Record entries in the order displayed in the problem statement. Credit account titles are automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Date Account Titles and Explanation Debit Credit Dec. 31 To record depreciation expense for 2017) sPolicy I ®2000-2017John wuerSonainc. All Rights Reserved. A Division of 20hnwierasonainc. Version 4,24.2.4

Explanation / Answer

The journal entries are as below:

Note:

1. Depreciation on computer = $36000/ 3 * 1/2 = $6000

2. Depreciation on Truck = ($25000 - $4000) / 5 = $4200

Date Account titles and explanation Debit Credit Jan-01 Accumulated Depreciation 62000 Machinery 62000 (Being machinery written off) Jun-30 Depreciation-Computer 6000 Accumulated Depreciation-Computer 6000 (To record deprectiation for 2017) Jun-30 Cash 5000 Accumulated Depreciation-Computer 30000 Loss on sale of asset 1000 Computer 36000 (Being sale of computer recorded) Dec-31 Depreciation-Truck 4200 Accumulated Depreciation-Truck 4200 (To record deprectiation for 2017) Dec-31 Cash 9000 Accumulated Depreciation-Truck 16800 Truck 25000 Gain on sale of asset 800 (Being sale of truck recorded)

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