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 $29,200, paying cash. Nov. 2 Dec. 31 Paid garage $650 for miscellaneous repairs to the truck. Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $4,505 for the truck. Year 2 Jan. 6 Apr. 1 Purchased a new truck for $49,900, paying cash. Sold the used truck purchased on January 4 of Year 1 for $15,710. (Record depreciation to date in Year 2 for the truck.) June 11 Paid garage $495 for miscellaneous repairs to the truck. Dec. 31 Recorded depreciation for the new truck. It has an estimated residual value of $8,790 and an estimated life of five years. Year 3 July 1 Oct. 2 Purchased a new truck for $55,320, paying cash. Sold the truck purchased January 6, Year 2, for $17,708. (Record depreciation to date for Year 3 for the truck.) Dec. 31 Recorded depreciation on the remaining truck purchased on July 1. It has an estimated residual value of $11,715 and an estimated useful life of eight years. ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 610 Interest Revenue 112 Accounts Receivable 620 Gain on Sale of Delivery Truck 114 Interest Receivable 621 Gain on Sale of Equipment 115 Notes Receivable 116 Merchandise Inventory EXPENSES 117 Supplies 510 Cost of Merchandise Sold 119 Prepaid Insurance 520 Salaries Expense 120 Land 521 Advertising Expense 123 Delivery Truck 522 Depreciation Expense-Delivery Truck 124 Accumulated Depreciation-Delivery Truck 523 Delivery Expense 525 Truck Repair Expense 125 Equipment 126 Accumulated Depreciation-Equipment 529 Selling Expenses 130 Mineral Rights 531 Rent Expense 131 Accumulated Depletion 532 Depreciation Expense-Equipment 132 Goodwill 533 Depletion Expense 133 Patents 534 Amortization Expense-Patents 535 Insurance Expense LIABILITIES 536 Supplies Expense 210 Accounts Payable 539 Miscellaneous Expense 211 Salaries Payable 710 Interest Expense 213 Sales Tax Pavable 720 Loss on Sale of Delivery Truck Journal Journalize the transactions and the adjusting entries. Scroll down to access pages 2 and 3 of the journal. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use i explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Journalize the Year 1 transactions and adjusting entries on Page 1 PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 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 1 2 3 4 5 6 7 8 9 10 11 Adjusting Entries 12 13 Joumalize the Year 3 transactions and adjusting entries on Page 3. PAGE 3 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 5 7 3 Adjusting Entries 10 11
