Question #16

Required information [The following information applies to the questions displayed below.] The following transactions relate to Academy Towing Service. Assume the transactions for the purchase of the wrecker and any capital improvements occur on January 1 of each year. Year 1 1. Acquired $71,000 cash from the issue of common stock. 2. Purchased a used wrecker for $33,000 cash. It has an estimated useful life of three years and a $5,000 salvage value. 3. Paid sales tax on the wrecker of $2,000. 4. Collected $57,100 in towing fees. 5. Paid $12,100 for gasoline and oll. 6. Recorded straight-line depreciation on the wrecker for Year 1. 7. Closed the revenue and expense accounts to Retained Earnings at the end of Year 1 . Year 2 1. Paid for a tune-up for the wrecker's engine, $1,000. 2. Bought four new tires, $1,350. 3. Collected $63,000 in towing fees. 4. Paid $18,100 for gasoline and oil. 5. Recorded straight-line depreciation for Year 2. 6. Closed the revenue and expense accounts to Retained Earnings at the end of Year 2. Year 3 1. Paid to overhaul the wrecker's engine, $4,900, which extended the life of the wrecker to a total of four years. The salvage value did not change. 2. Paid for gasoline and oil, $19,200. 3. Collected $66,000 in towing fees. 4. Recorded straight-line depreciation for Year 3. 5. Closed the revenue and expense accounts at the end of Year 3. b. For each year, record the transactions in general journal form and post them to T-accounts. b. For each year, record the transactions in general journal form and post them to T-accounts. Complete this question by entering your answers in the tabs below. For year 1 , record the transactions in general journal form. (If no entry is required for a transaction/6 required" in the first account field.) Journal entry worksheet EFG Acquired $71,000 cash from the issue of common stock. Record the transaction. Note: Enter debits before credits b. For each year, record the transactions in general journal form and post them to T-accounts. Complete this question by entering your answers in the tabs below. For year 2, record the transactions in general journal form. (If no entry is required for a transaction/ required" in the first account field.) Journal entry worksheet Paid for a tune-up for the wrecker's engine, $1,000. Record the transaction. Note: Enter debits before credits. b. For each year, record the transactions in general journal form and post them to T-accounts. Complete this question by entering your answers in the tabs below. For year 3, record the transactions in general journal form. (If no entry is required for a transaction/event, required" in the first account field.) Journal entry worksheet Paid to overhaul the wrecker's engine, $4,900, which extended the life of the wrecker to a total of four years. The salvage value did not change. Record the transaction. Note: Enter debits before credits. (1) Required information For each year, post the entries to T-accounts. (1) Required information Year 3 General Journal