Cullumber Company had the following assets on January 1, 2022.Useful Life(in years)Salvage Value$ 0ItemCostPurchase DateMachinery$72,000Jan. 1, 201210Forklift31,000Jan. 1, 2019Truck37,400Jan. 1, 20178.3,000During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold onJune 30 for $12,100. The truck was discarded on December 31.Journalize all entries required on the above dates, indluding entries to update depreciation, where applicable, on disposedassets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (Creditaccount titles are automatically indented when the amount is entered. Do not indent manually. If no entry isrequired, select "No Entry" for the account titles and enter 0 for the amounts.)DateAccount Titles and ExplanationDebitCredit(To record depreciation expense on forklift)(To record sale of forklift)(To record depreciation expense on truck) Useful LifeItemCostPurchase Date(in years)Salvage ValueMachinery$72,000Jan. 1, 201210$ 0Forklift31,000Jan. 1, 2019Truck37,400Jan. 1, 20178.3,000During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold onJune 30 for $12,100. The truck was discarded on December 31.Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposedassets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (Creditaccount titles are automatically indented when the amount is entered. Do not indent manually. If no entry isrequired, select "No Entry" for the account titles and enter 0 for the amounts.)DateAccount Titles and ExplanationDebitCredit(To record depreciation expense on forklift)(To record sale of forklift)(To record depreciation expense on truck)(To record sale of truck)<>

Name: Cullumber Company had the following assets on January 1, 2022.Useful
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Cullumber Company had the following assets on January 1, 2022.Useful Life(in years)Salvage Value$ 0ItemCostPurchase DateMachinery$72,000Jan. 1, 201210Forklift31,000Jan. 1, 2019Truck37,400Jan. 1, 20178.3,000During 2022, each of the assets was removed

Solution:- Journal entries in the books of "Cullumber" company as follows:-

Business

Accounting

During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $12,100. The truck was discarded on December 31. Journalize all entries required on the above dates, indluding entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $12,100. The truck was discarded on December 31. Journalize all entries required on the above dates, indluding entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Vaughn Corporation owns machinery that cost $26,000 when purchased on July 1, 2021. Depreciation has been recorded at a rate of $3,120 per year, resulting in a balance in accumulated depreciation of $10,920 at December 31, 2025. The machinery is sold on September 1, 2026, for $6,760. Prepare journal entries to (a) update depreciation for 2026 and (b) record the sale. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) No. Account Titles and Explanation (a) (b) Debit Credit
Mango Company purchased a delivery truck for $66,000 on January 2, 2021. The useful life was estimated to be 5 years and the salvage value was estimated at $26,000. The truck is depreciated using the straight-line method. When preparing adjusting entries for December 31, 2023, it was discovered that the salvage value had not been deducted when computing depreciation for 2021 and 2022. The correct amount of deprecation was recorded for 2023. What additional journal entry should be made? Answer a. Debit Accumulated Depreciation for $10,400 and credit Retained Earnings for $10,400. b. Debit Accumulated Deprecation for $15,600 and credit Depreciation Expense for $15,600. c. Debit Accumulated Deprecation for $16,000 and credit Retained Earnings for $16,000. d. No additional entry should be made as the error will be accounted for in the current period and prospectively.
Buffalo Cole Inc. acquired the following assets in January of 2018. Equipment, estimated service life, 5 years; salvage value, $13,700 $523,700 Building, estimated service life, 30 years; no salvage value $678,000 The equipment has been depreciated using the sum-of-the-years’-digits method for the first 3 years for financial reporting purposes. In 2021, the company decided to change the method of computing depreciation to the straight-line method for the equipment, but no change was made in the estimated service life or salvage value. It was also decided to change the total estimated service life of the building from 30 years to 40 years, with no change in the estimated salvage value. The building is depreciated on the straight-line method. (a) Prepare the general journal entry to record depreciation expense for the equipment in 2021. (b) Prepare the journal entry to record depreciation expense for the building in 2021. (Round answers to 0 decimal places,…
Waterway Company purchased a computer system for $86,700 on January 1, 2019. It was depreciated based on a 8-year life and an $16,700 salvage value. On January 1, 2021, Waterway revised these estimates to a total useful life of 4 years and a salvage value of $10,500. Waterway uses straight-line depreciation Prepare Waterway's entry to record 2021 depreciation expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit
On January 1, 2022, Pina Colada Country Club purchased a new riding mower for $29,000. The mower is expected to have a 8-year life with a $8,000 salvage value.What journal entry would Pina Colada make on December 31, 2022, if it uses straight-line depreciation? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31 enter an account title for the journal entry on December 31 enter a debit amount enter a credit amount enter an account title for the journal entry on December 31 enter a debit amount enter a credit amount
Marigold Company owns equipment that cost $79,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $7,900 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Marigold Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) (a) (b) (c) (d) (e) (A) SR. Account Titles and Explanation (a) (b) Sold for $45,000 on January 1, 2022. Sold for $45,000 on April 1, 2022. Sold for $17,000 on January 1, 2022. Sold for $17,000 on September 1, 2022 Repeat (a), assuming Marigold uses double-declining balance…
Blue Corporation purchased a new machine for its assembly process on August 1, 2025. The cost of this machine was $169,800. The company estimated that the machine would have a salvage value of $16,800 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 20,000 hours. Year-end is December 31. Compute the depreciation expense under the following methods. Each of the following should be considered unrelated. (Round depreciation rate per hour to 2 decimal places, e.g. 5.35 for computational purposes. Round your answers to O decimal places, e.g. 45,892.) (a) Straight-line depreciation for 2025 (b) (c) (d) Activity method for 2025, assuming that machine usage was 800 hours Sum-of-the-years'-digits for 2026 Double-declining-balance for 2026 GA $ GA GA $ $
Rayya Company purchases a machine for $151,200 on January 1, 2021. Straight-line depreciation is taken each year for four years assuming a seven-year life and no salvage value. The machine is sold on July 1, 2025, during its fifth year of service. Prepare entries to record the partial year’s depreciation on July 1, 2025, and to record the sale under each separate situation. (1) The machine is sold for $64,800 cash. (2) The machine is sold for $51,840 cash. 1. Record the depreciation expense as of July 1, 2025. 2. Record the sale of the machinery for $64,800 cash. 3. Record the machine sold for $51,840 cash. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Tamarisk Cole Inc. acquired the following assets in January of 2018. Equipment, estimated service life, 5 years; salvage value, $15,500 $546,500 Building, estimated service life, 30 years; no salvage value $639,000 The equipment has been depreciated using the sum-of-the-years’-digits method for the first 3 years for financial reporting purposes. In 2021, the company decided to change the method of computing depreciation to the straight-line method for the equipment, but no change was made in the estimated service life or salvage value. It was also decided to change the total estimated service life of the building from 30 years to 40 years, with no change in the estimated salvage value. The building is depreciated on the straight-line method. (a) Prepare the general journal entry to record depreciation expense for the equipment in 2021. (b) Prepare the journal entry to record depreciation expense for the building in 2021. (Round answers to 0 decimal places,…
At the beginning of 2021, Westglow Company purchased equipment for $525,000 that was assigned an estimated useful life of 5 years and an estimated salvage value of $50,000. The company uses straight-line depreciation for all of its plant and equipment. When preparing adjusting entries at December 31, 2024, it was discovered that the bookkeeper had failed to deduct the salvage value in computing the depreciation base for 2021, 2022, and 2023. Westglow issues 2-year comparative financial statements. Which of the following statements describes the procedure that should be followed at December 31, 2024? Answer a. Westglow should compute the amount of annual depreciation expense that should have been recorded for 2023 and adjust accumulated depreciation and depreciation expense for the difference. The financial statements for 2023 should be restated and the effect of the error should be reported as an adjustment to the beginning balance of retained earnings for 2024. b.…
Blue Company purchased a computer system for $87,300 on January 1, 2024. It was depreciated based on a 8-year life and an $19,700 salvage value. On January 1, 2026, Blue revised these estimates to a total useful life of 4 years and a salvage value of $9,100. Prepare Blue's entry to record 2026 depreciation expense. Blue uses straight-line depreciation. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
On January 1, 2021, Riverbed Company purchased on credit machinery costing $165,000 and incurred $5.705 in installation costs. The machinery has an estimated useful life of 15 years and a residual value of $10,790. The company uses the straight-line method of depreciation. At the end of 2022, Riverbed recorded depreciation and assessed the asset, determining a recoverable amount of $137,800. Riverbed sold the equipment to Voilex Corporation on June 30, 2023, for $135,500. Prepare the necessary entries assuming Riverbed has a December 31 year-end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem) Account Titles and Explanation Credit Date 2021 x 1.2021 31.2022 31, 2022 ne 30, 2023 230, 2023…