Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.)

image text in transcribed

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Using QuickBooks Online For Accounting 2021

Authors: Glenn Owen

4th Edition

0357442164, 9780357442166

More Books

Students also viewed these Accounting questions

Question

What were the processes that caused the outcomes?

Answered: 1 week ago