Question
Transactions for Fixed Assets, Including Sale The following transactions, adjusting entries, and closing entries were completed by King Furniture Co. during a three-year period. All
Transactions for Fixed Assets, Including Sale
The following transactions, adjusting entries, and closing entries were completed by King 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.
2010 |
|
Jan. 4. | Purchased a used delivery truck for $61,440, paying cash. |
Feb. 24. | Paid garage $220 for changing the oil, replacing the oil filter, and tuning the engine on the delivery truck. |
Dec. 31. | Recorded depreciation on the truck for the fiscal year. The estimated useful life of the truck is 8 years, with a residual value of $12,900 for the truck. |
2011 |
|
Jan. 3. | Purchased a new truck for $70,560, paying cash. |
Mar. 7. | Paid garage $330 to tune the engine and make other minor repairs on the used truck. |
Apr. 30. | Sold the used truck for $40,440. (Record depreciation to date in 2011 for the truck.) |
Dec. 31. | Record depreciation for the new truck. It has an estimated trade-in value of $12,700 and an estimated life of 7 years. |
2012 |
|
July 1. | Purchased a new truck for $81,000, paying cash. |
Oct. 7. | Sold the truck purchased January 3, 2011, for $41,700. (Record depreciation for the year.) |
Dec. 31. | Recorded depreciation on the remaining truck. It has an estimated residual value of $14,600 and an estimated useful life of 10 years. |
Instructions:
Journalize the transaction and the adjusting entries.
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