PA9-4 (Algo) Recording Transactions and Adjustments for Tangible and Intangible Assets [LO 9-1, LO 9- 2, LO 9-3, LO 9-4, LO 9-5, LO 9-6] The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents. January 2, 2020 Paid $88,000 cash to purchase storage shed components. January 3, 2020 Paid $4,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $7,000. April 1, 2020 Paid $31,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $5,000. This vehicle is to be recorded in the Truck account. May 13, 2020 Paid $300 cash for minor repairs to the pickup truck's upholstery. July 1, 2020 Paid $27,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years. December 31, 2020 Recorded depreciation and amortization on the pickup truck, storage shed, and patent. June 30, 2021 December 31, 2021 Required: Sold the pickup truck for $26,000 cash. (Record the depreciation on the truck prior to recording its disposal.) Recorded depreciation on the storage shed. Recorded the patent amortization. After recording the patent amortization, determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero). Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)
PA9-4 (Algo) Recording Transactions and Adjustments for Tangible and Intangible Assets [LO 9-1, LO 9- 2, LO 9-3, LO 9-4, LO 9-5, LO 9-6] The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents. January 2, 2020 Paid $88,000 cash to purchase storage shed components. January 3, 2020 Paid $4,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $7,000. April 1, 2020 Paid $31,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $5,000. This vehicle is to be recorded in the Truck account. May 13, 2020 Paid $300 cash for minor repairs to the pickup truck's upholstery. July 1, 2020 Paid $27,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years. December 31, 2020 Recorded depreciation and amortization on the pickup truck, storage shed, and patent. June 30, 2021 December 31, 2021 Required: Sold the pickup truck for $26,000 cash. (Record the depreciation on the truck prior to recording its disposal.) Recorded depreciation on the storage shed. Recorded the patent amortization. After recording the patent amortization, determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero). Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![PA9-4 (Algo) Recording Transactions and Adjustments for Tangible and Intangible Assets [LO 9-1, LO 9-
2, LO 9-3, LO 9-4, LO 9-5, LO 9-6]
The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics
International. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for
buildings, and straight-line amortization for patents.
January 2, 2020 Paid $88,000 cash to purchase storage shed components.
January 3, 2020 Paid $4,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a
residual value of $7,000.
April 1, 2020 Paid $31,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of
five years and a residual value of $5,000. This vehicle is to be recorded in the Truck account.
May 13, 2020 Paid $300 cash for minor repairs to the pickup truck's upholstery.
July 1, 2020 Paid $27,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to
have a remaining useful life of five years.
December 31, 2020 Recorded depreciation and amortization on the pickup truck, storage shed, and patent.
June 30, 2021
December 31, 2021
Required:
Sold the pickup truck for $26,000 cash. (Record the depreciation on the truck prior to recording its disposal.)
Recorded depreciation on the storage shed. Recorded the patent amortization. After recording the patent
amortization, determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down
the book value to zero).
Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal
Entry Required" in the first account field. Do not round intermediate calculations.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffa51a4a1-47dc-4530-80a9-199e6acb2fc9%2Fe6de4071-1a1c-45e3-b124-9ec9a00253cf%2Fx4nktf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:PA9-4 (Algo) Recording Transactions and Adjustments for Tangible and Intangible Assets [LO 9-1, LO 9-
2, LO 9-3, LO 9-4, LO 9-5, LO 9-6]
The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics
International. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for
buildings, and straight-line amortization for patents.
January 2, 2020 Paid $88,000 cash to purchase storage shed components.
January 3, 2020 Paid $4,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a
residual value of $7,000.
April 1, 2020 Paid $31,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of
five years and a residual value of $5,000. This vehicle is to be recorded in the Truck account.
May 13, 2020 Paid $300 cash for minor repairs to the pickup truck's upholstery.
July 1, 2020 Paid $27,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to
have a remaining useful life of five years.
December 31, 2020 Recorded depreciation and amortization on the pickup truck, storage shed, and patent.
June 30, 2021
December 31, 2021
Required:
Sold the pickup truck for $26,000 cash. (Record the depreciation on the truck prior to recording its disposal.)
Recorded depreciation on the storage shed. Recorded the patent amortization. After recording the patent
amortization, determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down
the book value to zero).
Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal
Entry Required" in the first account field. Do not round intermediate calculations.)
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