Question
Please help !! The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company
Please help !!
The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents.
2018 | ||||
January | 2 | Paid $102,000 cash to purchase storage shed components. | ||
January | 3 | 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 | Paid $48,000 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. | ||
May | 13 | Paid $600 cash for minor repairs to the pickup truck's upholstery. | ||
July | 1 | Paid $13,000 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 | Recorded depreciation and amortization on the pickup truck, storage shed, and patent. | ||
2019 | ||||
June | 30 | Sold the pickup truck for $41,000 cash. (Record the depreciation on the truck prior to recording its disposal.) | ||
December | 31 | Recorded depreciation on the storage shed. Also determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero). |
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Record the purchase of storage shed components for $102,000.
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2
Record the payment of $4,000 to have the storage shed erected.
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3
Record the purchase of a pickup truck for $48,000.
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4
Record the repairs of $600 to the pickup truck.
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5
Record the purchase of a patent for $13,000 on a new paper bag manufacturing process.
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6
Record the depreciation and amortization expense on the pickup truck, storage shed and patent for the year.
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7
Record the depreciation for the truck up to the date of sale.
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8
Record the sale of the truck for $41,000 cash.
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9
Record the depreciation on the storage shed for the year.
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10
Record the Patent Amortization expense for the full year.
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11
Record the reversal of the accumulated amortization of patents.
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12
Record any impairment loss incurred on the patent.
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