$1.$ Assume that Kwik Kopy uses straight$-$line depreciation and prepare the following entries:

$($a$)$ Adjusting entries for depreciation on December $31$ of $20-3$ through $20-5.$

Additional Instruction

General Journal Instructions

PAGE $3$PAGE $4$PAGE $5$

GENERAL JOURNAL

DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT

$1$

$2$

$($b$)$ Adjusting entry for depreciation on June $30,20-6,$ just prior to trading in the asset.

$($c$)$ On July $1,20-6,$ the copy machine was traded in for a new copy machine. The market value of the new machine is $$38,000.$ Kwik Kopy must trade in the old copy machine and pay $$22,000$ for the new machine.

PAGE $1$

GENERAL JOURNAL

DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT

$1$

$2$

$3$

$4$

$5$

$6$

$7$

$2.$ Assume that Kwik Kopy uses sum$-$of$-$the$-$years$-$digits depreciation and prepare the following entries:

$($a$)$ Adjusting entries for depreciation on December $31,20-3$ through $20-5.$

Additional Instruction

PAGE $3$PAGE $4$PAGE $5$

GENERAL JOURNAL

DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT

$1$

$2$

$($b$)$ Adjusting entry for depreciation on June $30,20-6,$ just prior to trading in the asset.

$($c$)$ On July $1,20-6,$ the copy machine was traded in for a new copy machine. The market value of the new machine is $$38,000.$ Kwik Kopy must trade in the old copy machine and pay $$22,000$ for the new machine.

PAGE $1$

GENERAL JOURNAL

DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT

$1$

$2$

$3$

The balance in the Accumulated Depreciation $-$ Machinery account does not represent funds to replace the machinery when it wears out. However, it represents the cumulative depreciation expense charged against the machinery over its useful life $().$ That account serves to reflect the decrease in the value of the machinery over time due to wear and tear or other factors. Also, the net book value or carrying value of the machinery can be determined by subtracting the accumulated depreciation from the original cost of the machinery $().$ It is important to know that the balance in the Accumulated Depreciation $-$ Machinery account does not indicate the availability of funds for machinery replacement, but it provides information on the depreciation expense incurred on the machinery $().$