Question
Write Journal Entries: The following transactions and adjusting entries were completed by a paper-packaging company called Freddie Graphics International during 2015 and 2016. The company
Write Journal Entries:
The following transactions and adjusting entries were completed by a paper-packaging company called Freddie Graphics International during 2015 and 2016. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents.
January | 2 | , 2015 | Paid $89,000 cash to purchase storage shed components. |
January | 3 | , 2015 | Paid $6,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $9,000. |
April | 1 | , 2015 | Paid $32,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $7,000. |
May | 13 | , 2015 | Paid $200 cash for repairs to the pickup truck. |
July | 1 | , 2015 | Paid $26,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years. |
December | 31 | , 2015 | Recorded depreciation and amortization on the pickup truck, storage shed, and patent. |
June | 30 | , 2016 | Sold the pickup truck for $27,000 cash. (Record the depreciation on the truck prior to recording its disposal.) |
December | 31 | , 2016 | Recorded depreciation on the storage shed. Determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero). |
1) Record the following journal entries:
A) (Jan 2, 2015) Record the purchase of storage shed components for $89,000.
B) (Jan 3, 2015) Record the payment of $6,000 to have the storage shed erected.
C) (April 1, 2015) Record the purchase of a pickup truck for $32,000.
D) (May 13, 2015) Record the repairs of $200 to the pickup truck.
E) (July 1, 2015) Record the purchase of a patent for $26,000 on a new paper bag manufacturing process.
F) (December 31, 2015) Record the depreciation and amortization expense on the pickup truck, storage shed and patent for the year.
G) (June 30, 2015) Record the depreciation for the truck up to the date of sale.
H) (June 30, 2015) Record the sale of the pickup truck for $27,000 cash.
I) (December 31, 2015) Record the depreciation on the storage shed for the year.
J) (December 31, 2015) Record any impairment loss incurred on the patent.
(Choice bank: No journal entry, accounts payable, accounts receivable, accumulated amortization-patent, accumulated depreciation-building, accumulated depreciation-equipment, advertising expense, allowance for doubtful accounts, amortization expense, bad debt expense, buildings, cash, contributed capital, cost of goods sold, delivery expense, depreciation expense, dividends payable, equipment, franchise rights, gain on disposal, goodwill, impairment loss, income tax expense, income tax payable, insurance expense, income tax payable, insurance expense, interest expense, interest payable, interest receivable, interest revenue, inventory, land, legal expense, licensing rights, loss of disposal, notes payable long term, notes payable short term, notes receivable, office expenses, operating expenses, other current assets, other current liabilities, other expenses, other intangibles, other noncurrent assets, other noncurrent liabilities, other revenue, patent, prepaid insurance, prepaid rent, purchases, rent expense, rent payable, rent revenue, repairs and maintenance expense, retained earnings, salaries and wages expense, salaries payable, sales discounts, sales returns and allowances, sales revenue, selling general and administrative expense, supplies, supplies expense, trademark, travel expense, unearned revenue, utilities expense, wages payable)
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