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, 2020Paid $97,000 cash to purchase storage shed components.January 3, 2020Paid $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, 2020Paid $43,000 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, 2020Paid $700 cash for minor repairs to the pickup truck's upholstery.July 1, 2020Paid $18,000 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, 2020Recorded depreciation and amortization on the pickup truck, storage shed, and patent. June 30, 2021Sold the pickup truck for $37,000 cash. (Record the depreciation on the truck prior to recording its disposal.)December 31, 2021Recorded 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).Required: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.)

Journal entries represent the recording of the financial transactions on initial basis. The…

Answered: The following transactions and…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4PB: During the current year, Arkells Inc. made the following expenditures relating to plant machinery. ...

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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 $97,000 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 $43,000 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 $700 cash for minor repairs to the pickup truck's upholstery.
July 1, 2020	Paid $18,000 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	Sold the pickup truck for $37,000 cash. (Record the depreciation on the truck prior to recording its disposal.)
December 31, 2021	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).

Required:

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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