Exercise 9-8 Here are selected 2017 transactions of Novak Corporation. Journaliz

Question

Exercise 9-8

Here are selected 2017 transactions of Novak Corporation.

Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Novak 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.)

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2007. The machine cost $61,400 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 cost $35,600 and had a useful life of 4 years with no salvage value. The computer was sold for $4,700 cash. Dec. 31 Sold a delivery truck for $9,500 cash. The truck cost $24,100 when it was purchased on January 1, 2014, and was depreciated based on a 5-year useful life with a $3,300 salvage value.

Explanation / Answer

ournalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Novak Corporation uses straight-line depreciation.

Date accounts & explanation debit credit Jan 1 Accumlated depreciation a/c 61400 Machine a/c 61400 (To record retirement of machine) June 30 Depreciation expenses a/c 4450 Accumlated depreciation a/c 4450 (To record depreciation) June 30 Cash a/c 4700 Accumlated depreciation (35600/4)*2.5 22250 Loss on sale of computer 8650 Computer a/c 35600 (To record sale of computer) Dec 31 Depreciation expenses a/c 4160 Accumlated depreciation a/c 4160 (To record depreciation) Dec 31 Cash a/c 9500 Accumlated depreciation a/c 16640 Gain on sale of delivery truck 2040 Delivery truck a/c 24100 (To record sale of delivery truck )

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