Question
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
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 $91,000 cash to purchase storage shed components. | ||
January | 3 | Paid $2,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $5,000. | ||
April | 1 | Paid $34,000 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 $3,000. | ||
May | 13 | Paid $600 cash for minor repairs to the pickup truck's upholstery. | ||
July | 1 | Paid $24,000 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 $29,000 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). |
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.)
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