Instructions The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. Year 1 Jan. 4 Nov. 2 Purchased a used delivery truck for $26,000, paying cash. Paid garage $825 for miscellaneous repairs to the truck. 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. Dec. 31 Year 2 Jan. 6. Apr. 1. June 11. Purchased a new truck for $60,000, paying cash. Sold the used truck for $14,000. (Record depreciation to date in Year 2 for the truck.) Pald garage $280 for miscellaneous repairs to the truck Record depreciation for the new truck. It has an estimated residual value of $7,000 and an estimated life of five years Dec. 31 Year 3 July 1 Oct. 2 Purchased a new truck for $65,000, paying cash. Sold the truck purchased January 6, Year 2 for $19,620. (Record depreciation to date for Year 3 for the truck.) Recorded depreciation on the remaining truck. It has an estimated residual value of $6,000 and an estimated useful life of eight years. Dec. 31 Instructions Journal Journalize the transactions and the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles. Scroll down to access pages 2 and 3 of the journal. Do not round intermediate calculations Joumalize the Year 1 transactions and adjusting entries on Page 1 PAGE 1 ACCOUNTING EQUATION JOURNAL CREDIT ASSETS LIABILITIES DEBIT POST. REF EQUITY DATE DESCRIPTION 1 2 1 4 5 Adjusting Entries 5 7 Instructions Journal ACCOUNTING EQUATION JOURNAL CREDIT ASSETS LIABILITIES EQUITY DERIT POST. REF DATE DESCRIPTION 1 2 5 4 5 6 7 E 9 10 11 Adjusting Entries 12 15 Journal Journalize the Year 3 transactions and adjusting entries on Page 3 PAGE 3 JOURNAL ACCOUNTING EQUATION DEBIT DESCRIPTION CREDIT LIABILITIES POST. REF. ASSETS DATE EQUITY 1 2 3 4 7 9 Adjusting Entries 10 11 Chart of Accounts CHART OF ACCOUNTS Legacy Furniture Co. General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 610 Interest Revenue 620 Gain on Sale of Delivery Truck 621 Gain on Sale of Equipment EXPENSES 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 123 Delivery Truck 124 Accumulated Depreciation-Delivery Truck 125 Equipment 126 Accumulated Depreciation-Equipment 130 Mineral Rights 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Delivery Truck 523 Delivery Expense 525 Truck Repair and Maintenance Expense 529 Selling Expenses 531 Rent Expense Chart of Accounts 125 Equipment 520 Truck Repair and maintenance Expense 126 Accumulated Depreciation-Equipment 130 Mineral Rights 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense-Equipment 533 Depletion Expense 131 Accumulated Depletion 132 Goodwill 133 Patents 534 Amortization Expense-Patents LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable 535 Insurance Expense 536 Supplies Expense 539 Miscellaneous Expense 710 Interest Expense 720 Loss on Sale of Delivery Truck 721 Loss on Sale of Equipment EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends
