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The following transactions and adjusting entries were completed by a local delivery company called Fast Delivery. The company uses straight-line depreciation for delivery vehicles, double-declining-balance
The following transactions and adjusting entries were completed by a local delivery company called Fast Delivery. The company uses straight-line depreciation for delivery vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for franchise rights.
2018
January | 2 | Paid $167,000 cash to purchase a small warehouse building near the airport. The building has an estimated life of 20 years and a residual value of $3,600. | ||
July | 1 | Paid $41,000 cash to purchase a delivery van. The van has an estimated useful life of five years and a residual value of $8,200. | ||
October | 2 | Paid $600 cash to paint a small office in the warehouse building. | ||
October | 13 | Paid $150 cash to get the oil changed in the delivery van. | ||
December | 1 | Paid $102,000 cash to UPS to begin operating Fast Delivery business as a franchise using the name The UPS Store. This franchise right expires in five years. | ||
December | 31 | Recorded depreciation and amortization on the delivery van, warehouse building, and franchise right. |
2019
June | 30 | Sold the warehouse building for $134,000 cash. (Record the depreciation on the building prior to recording its disposal.) | ||
December | 31 | Recorded depreciation on the delivery van and amortization on the franchise right. Determined that the franchise right was not impaired in value. |
Required: Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)
Answer is complete but not entirely correct. No Date General Journal Debit Credit 1 Jan 02, 2018 167,000 Buildings Cash 167,000 2 > Jul 01, 2018 41,000 > Equipment Cash 41,000 3 Oct 02, 2018 600 Repairs and Maintenance Expense Cash 600 4 Oct 13, 2018 150 Repairs and Maintenance Expense Cash 00 150 5 Dec 01, 2018 Franchise Rights 102,000 Cash 102,000 6 Dec 31, 2018 16,340 X 1,700 Depreciation Expense Amortization Expense Accumulated DepreciationBuildings Accumulated Depreciation Equipment Accumulated Amortization 16,340 X 3,280 1,700 7 Jun 30, 2019 7,353 X Depreciation Expense Accumulated Depreciation Buildings 7,353 X 8 Jun 30, 2019 Cash 134,000 Accumulated Depreciation Buildings Loss on Disposal Buildings 23,873 X 9,127 X 167,000 9 Dec 31, 2019 6,560 Depreciation Expense Amortization Expense Accumulated Depreciation Equipment Accumulated Amortization 20,400 6,560 20,400
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