The following transactions and adjusting entries were completed by Legacy Furnit
ID: 2576720 • Letter: T
Question
The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. Year 1 Jan. 4. Purchased a used delivery truck for $28,000, paying cash. Nov. 2. Paid garage $675 for miscellaneous repairs to the truck. Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $5,000 for the truck. Year 2 Jan. 6. Purchased a new truck for $48,000, paying cash. Apr. 1. Sold the used truck for $15,000. (Record depreciation to date in Year 2 for the truck.) June 11. Paid garage $450 for miscellaneous repairs to the truck. Dec. 31. Record depreciation for the new truck. It has an estimated residual value of $9,000 and an estimated life of five years. Year 3 July 1. Purchased a new truck for $54,000, paying cash. Oct. 2. Sold the truck purchased January 6, Year 2, for $16,750. (Record depreciation to date for Year 3 for the truck.) Dec. 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $12,000 and an estimated useful life of eight years. Journalize the transactions and the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles.
Chart Of Accounts.
Journal
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JOURNAL
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15 / 15
Journalize the Year 2 transactions and adjusting entries on Page 2.
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JOURNAL
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Journalize the Year 3 transactions and adjusting entries on Page 3.
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CHART OF ACCOUNTS Legacy Furniture Co. General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 123 Delivery Truck 124 Accumulated Depreciation-Delivery Truck 125 Equipment 126 Accumulated Depreciation-Equipment 130 Mineral Rights 131 Accumulated Depletion 132 Goodwill 133 Patents LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income SummaryJournal
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PAGE 1
JOURNAL
ACCOUNTING EQUATION
Score: 76/76
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY1
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4
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Adjusting Entries
6
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Points:
15 / 15
Journalize the Year 2 transactions and adjusting entries on Page 2.
How does grading work?
PAGE 2
JOURNAL
ACCOUNTING EQUATION
Score: 125/150
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY1
2
3
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Adjusting Entries
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Points:
24.17 / 29
Journalize the Year 3 transactions and adjusting entries on Page 3.
Question not attempted.
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JOURNAL
ACCOUNTING EQUATION
Score: 0/125
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY1
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Adjusting Entries
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0 / 24
Feedback
REVENUE 410 Sales 610 Interest Revenue 620 Gain on Sale of Delivery Truck 621 Gain on Sale of Equipment EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Delivery Truck 523 Delivery Expense 525 Truck Repair Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense-Equipment 533 Depletion Expense 534 Amortization Expense-Patents 535 Insurance Expense 536 Supplies Expense 539 Miscellaneous Expense 710 Interest Expense 720 Loss on Sale of Delivery Truck 721 Loss on Sale of EquipmentExplanation / Answer
Date Accounts Title Dr cr Year 1 4-Jan Delivery Truck $28,000 Cash $28,000 2-Nov Truck repair expenses $675 Cash $675 31-Dec Depreciatioan Expense-Delivery Truck $14,000 Accumulated Depreciation-Delivery Truck $14,000 (DDB arte 1/4*200%=50%) (28000*50%) Year 2 6-Jan Delivery Truck $48,000 Cash $48,000 1-Apr Depreciatioan Expense-Delivery Truck $1,750 Accumulated Depreciation-Delivery Truck $1,750 (28000-14000)*50%*3/12 1-Apr Cash $15,000 Accumulated Depreciation-Delivery Truck $15,750 Gain on sale of Delivery Truck $2,750 Delivery Truck 28000 11-Jun Truck repair expenses $450 Cash $450 31-Dec Depreciatioan Expense-Delivery Truck $19,200 Accumulated Depreciation-Delivery Truck $19,200 (DDB arte 1/5*200%=40%) (48000*40%) Year 3 1-Jul Delivery Truck $54,000 Cash $54,000 2-Oct Depreciatioan Expense-Delivery Truck 8640 Accumulated Depreciation-Delivery Truck $8,640 (48000-19200)*40%*9/12 2-Oct Cash $16,750 Accumulated Depreciation-Delivery Truck $35,950 Gain on sale of Delivery Truck $4,700 Delivery Truck 48000 31-Dec Depreciatioan Expense-Delivery Truck 6750 Accumulated Depreciation-Delivery Truck $6,750 (DDB rate 1/8*200%=25%) (54000*25%)*6/12
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