Domestic
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Domestic
![PB9-4 (Algo) Recording Transactions and Adjustments for Tangible and Intangible Assets [LO 9-1, LO 9-
2, LO 9-3, LO 9-4, LO 9-5, LO 9-6]
The following transactions and adjusting entries were completed by a local delivery company called Fast Delivery. The
company uses straight-line depreciation for delivery vehicles, double-declining-balance depreciation for buildings, and
straight-line amortization for franchise rights.
January 2, 2020 Paid $169,000 cash to purchase a small warehouse building near the airport. The building has an estimated life of 20 years.
and a residual value of $3,400.
July 1, 2020 Paid $34,000 cash to purchase a delivery van. The van has an estimated useful life of five years and a residual value of
$6,800.
October 2, 2020 Paid $400 cash to paint a small office in the warehouse building.
October 13, 2020 Paid $100 cash to get the oil changed in the delivery van.
December 1, 2020 Paid $99,000 cash to UPS to begin operating Fast Delivery business as a franchise using the name The UPS Store. This
franchise right expires in five years.
December 31, 2020 Recorded depreciation and amortization on the delivery van, warehouse building, and franchise right.
June 30, 2021 Sold the warehouse building for $135,000 cash. (Record the depreciation on the building prior to recording its disposal.)
December 31, 2021 Recorded depreciation on the delivery van and amortization on the franchise right. Determined that the franchise right was
not impaired in value.
Required:
Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select
"No Journal Entry Required" in the first account field. Do not round intermediate calculations.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb7d8abd1-7229-4f31-9ea8-6d622c14836d%2F96fca6d4-060a-4e45-9071-d52fd992d469%2Fhtk6aun_processed.jpeg&w=3840&q=75)
Transcribed Image Text:PB9-4 (Algo) Recording Transactions and Adjustments for Tangible and Intangible Assets [LO 9-1, LO 9-
2, LO 9-3, LO 9-4, LO 9-5, LO 9-6]
The following transactions and adjusting entries were completed by a local delivery company called Fast Delivery. The
company uses straight-line depreciation for delivery vehicles, double-declining-balance depreciation for buildings, and
straight-line amortization for franchise rights.
January 2, 2020 Paid $169,000 cash to purchase a small warehouse building near the airport. The building has an estimated life of 20 years.
and a residual value of $3,400.
July 1, 2020 Paid $34,000 cash to purchase a delivery van. The van has an estimated useful life of five years and a residual value of
$6,800.
October 2, 2020 Paid $400 cash to paint a small office in the warehouse building.
October 13, 2020 Paid $100 cash to get the oil changed in the delivery van.
December 1, 2020 Paid $99,000 cash to UPS to begin operating Fast Delivery business as a franchise using the name The UPS Store. This
franchise right expires in five years.
December 31, 2020 Recorded depreciation and amortization on the delivery van, warehouse building, and franchise right.
June 30, 2021 Sold the warehouse building for $135,000 cash. (Record the depreciation on the building prior to recording its disposal.)
December 31, 2021 Recorded depreciation on the delivery van and amortization on the franchise right. Determined that the franchise right was
not impaired in value.
Required:
Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select
"No Journal Entry Required" in the first account field. Do not round intermediate calculations.)
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