FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transactions for fixed assets, including sale
The following transactions and
Legacy Furniture Co. during a three-year period. All are related to the
use of delivery equipment. The double-declining-balance method of
Year 1
Jan. 4. Purchased a used delivery truck for $26,000. paying cash.
Nov. 2. Paid garage $825 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
$2,000 for the truck.
Year 2
Jan. 6. Purchased a new truck for $60,000, paying cash.
Apr. 1. Sold the used truck for $14,000. (Record depreciation to
date in Year 2 for the truck.)
June 11. Paid garage $280 for miscellaneous repairs to the truck.
Dec. 31. Record depreciation for the new truck. It has an estimated
residual value of $7,000 and an estimated life of five years.
Year 3
July 1. Purchased a new truck for $65,000, paying cash.
Oct 2. Sold the truck purchased January 6, Year 2, for $19,520.
(Record depreciation to date for Year 8 for the truck.)
Dec 31. Recorded depreciation on the remaining truck. It has an
estimated residual value of $6,000 and an estimated useful life of eight
years.
Instructions
Journalize the transactions and the adjusting entries.
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