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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 $27,680, paying cash.
Nov. 2. Paid garage $725 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 $4,900 for the truck.
Year 2
Jan. 6. Purchased a new truck for $49,850, paying cash.
Apr. 1. Sold the used truck for $15,050. (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 $9,185 and an estimated life of five years.
Year 3
July 1. Purchased a new truck for $53,640, paying cash.
Oct. 2. Sold the truck purchased January 6, Year 2, for $17,607. (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 $12,345 and an estimated useful life of eight years.

Journalize the transactions and the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Legacy Furniture Co.

General Ledger

ASSETS

110 Cash

111 Petty Cash

112 Accounts Receivable

114 Interest Receivable

115 Notes Receivable

116 Merchandise Inventory

117 Supplies

119 Prepaid Insurance

120 Land

123 Delivery Truck

124 Accumulated Depreciation-Delivery Truck

125 Equipment

126 Accumulated Depreciation-Equipment

130 Mineral Rights

131 Accumulated Depletion

132 Goodwill

133 Patents

LIABILITIES

210 Accounts Payable

211 Salaries Payable

213 Sales Tax Payable

214 Interest Payable

215 Notes Payable

EQUITY

310 Common Stock

311 Retained Earnings

312 Dividends

313 Income Summary

REVENUE

410 Sales

610 Interest Revenue

620 Gain on Sale of Delivery Truck

621 Gain on Sale of Equipment

EXPENSES

510 Cost of Merchandise Sold

520 Salaries Expense

521 Advertising Expense

522 Depreciation Expense-Delivery Truck

523 Delivery Expense

525 Truck Repair Expense

529 Selling Expenses

531 Rent Expense

532 Depreciation Expense-Equipment

533 Depletion Expense

534 Amortization Expense-Patents

535 Insurance Expense

536 Supplies Expense

539 Miscellaneous Expense

710 Interest Expense

720 Loss on Sale of Delivery Truck

721 Loss on Sale of Equipment

Journalize the transactions and the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles.

Journalize the Year 1 transactions and adjusting entries on Page 1.

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1

Journalize the Year 2 transactions and adjusting entries on Page 2.

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1

2

Journalize the Year 3 transactions and adjusting entries on Page 3.

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1

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