The following transactions and adjusting entries were completed by Legacy Furniture Co. during a 3-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 $27,680, paying cash. Nov. 2. Paid garage $725 for miscellaneous repairs to the truck. Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is 4 years, with a residual value of $4,900 for the truck. Year 2   Jan. 6. Purchased a new truck for $49,850, paying cash. Apr. 1. Sold the used truck for $15,050. (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 $9,185 and an estimated life of 5 years. Year 3   July 1. Purchased a new truck for $53,640, paying cash. Oct. 2. Sold the truck purchased January 6, Year 2, for $17,607. (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 $12,345 and an estimated useful life of 8 years.     Required:   Journalize the transactions and the adjusting entries.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following transactions and adjusting entries were completed by Legacy Furniture Co. during a 3-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 $27,680, paying cash.
Nov. 2. Paid garage $725 for miscellaneous repairs to the truck.
Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is 4 years, with a residual value of $4,900 for the truck.
Year 2  
Jan. 6. Purchased a new truck for $49,850, paying cash.
Apr. 1. Sold the used truck for $15,050. (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 $9,185 and an estimated life of 5 years.
Year 3  
July 1. Purchased a new truck for $53,640, paying cash.
Oct. 2. Sold the truck purchased January 6, Year 2, for $17,607. (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 $12,345 and an estimated useful life of 8 years.
 
  Required:
  Journalize the transactions and the adjusting entries.
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