Transactions for Fixed Assets, including Sale 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 $15,360, paying cash Nov. 2 Paid garage $210 for miscellaneous repairs to the truck. Dec. 31 Recorded depreciation on the truck for the year. The estimated useful life of the truck is 4 years, with a residual value of $3,200 for the truck, Year 2 Jan. 6 Purchased a new truck for $9,000, paying cash. Apr. 1 Sold the used truck purchased on January 4 of Year 1 for $6,270. (Record depreciation to date in Year 2 for the truck.) June 11 Paid garage $200 for miscellaneous repairs to the truck. Dec. 31 Record depreciation for the new truck. It has an estimated residual value of $1,600 and an estimated life of 5 years Year 3 July 1 Purchased a new truck for $94,000, paying cash Oct. 2 Sold the truck purchased January 6, Year 2, for $3,480 (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 $16,900 and an estimated useful life of eight years Required: Journalize the transactions and the adjusting entries. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations. Round your final answers to the nearest cent. Year 1 Next Previous namel Amortization and Depletion Entries Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: a. Timber rights on a tract of land were purchased for $825,000 on February 22. The stand of timber is estimated at 5,500,000 board feet. During the current year, 1,500,000 board feet of timber were cut and sold. b. On December 31, the company determined that $990,000 of goodwill was impaired. c. Governmental and legal costs of $4,500,000 were incurred on April 3 in obtaining a patent with an estimated economic life of 10 years. Amortization is to be for three-fourths of a year Required: 1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. Do not round your intermediate calculation. Item Impairment, Amortization or Depletion Expense 1,500,000 X a. b. 1,500,000 X C Feedback Check My Work Intangible assets with indefinite lives are tested annually for impairment. Intangible assets with definite lives are amortized using the straight line method The depletion rate stays constant 2. Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item. If an amount box does not require an entry, leave it blank
