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The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment.
The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used.
Year 1 | |
Jan. 4. | Purchased a used delivery truck for $28,000, paying cash. |
Nov. 2. | Paid garage $675 for miscellaneous repairs to the truck. |
Dec. 31. | Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $5,000 for the truck. |
Year 2 | |
Jan. 6. | Purchased a new truck for $48,000, paying cash. |
Apr. 1. | Sold the used truck for $15,000. (Record depreciation to date in Year 2 for the truck.) |
June 11. | Paid garage $450 for miscellaneous repairs to the truck. |
Dec. 31. | Record depreciation for the new truck. It has an estimated residual value of $9,000 and an estimated life of five years. |
Year 3 | |
July 1. | Purchased a new truck for $54,000, paying cash. |
Oct. 2. | Sold the truck purchased January 6, Year 2, for $16,750. (Record depreciation to date for Year 3 for the truck.) |
Dec. 31. | Recorded depreciation on the remaining truck. It has an estimated residual value of $12,000 and an estimated useful life of eight years. |
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PAGE 1
JOURNAL
ACCOUNTING EQUATION
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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5 | Adjusting Entries | |||||||
6 | ||||||||
7 |
Journalize the Year 2 transactions and adjusting entries on Page 2.
PAGE 2
JOURNAL
ACCOUNTING EQUATION
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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1 | ||||||||
2 | ||||||||
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11 | Adjusting Entries | |||||||
12 | ||||||||
13 |
Journalize the Year 3 transactions and adjusting entries on Page 3.
PAGE 3
JOURNAL
ACCOUNTING EQUATION
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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9 | Adjusting Entries | |||||||
10 | ||||||||
11 |
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