Here are selected 2022 transactions of Novak Corporation. Jan. 1 June 30 Dec. 31 Retired a piece of machinery that was purchased on January 1, 2012. The machine cost $61,400 and had a useful life of 10 years with no salvage value. Sold a computer that was purchased on January 1, 2020. The computer cost $35,600 and had a useful life of 4 years with no salvage value. The computer was sold for $4,700 cash. Sold a delivery truck for $9,500 cash. The truck cost $24,100 when it was purchased on January 1, 2019, and was depreciated based on a 5-year useful life with a $3,300 salvage value. Prepare a tabular summary to record all transactions described on the above dates. Depreciation was last recorded on December 31, 2021. Update depreciation on assets disposed of, where applicable. Novak Corporation uses straight-line depreciation. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset. Liability or Equity item that was reduced.)
Here are selected 2022 transactions of Novak Corporation. Jan. 1 June 30 Dec. 31 Retired a piece of machinery that was purchased on January 1, 2012. The machine cost $61,400 and had a useful life of 10 years with no salvage value. Sold a computer that was purchased on January 1, 2020. The computer cost $35,600 and had a useful life of 4 years with no salvage value. The computer was sold for $4,700 cash. Sold a delivery truck for $9,500 cash. The truck cost $24,100 when it was purchased on January 1, 2019, and was depreciated based on a 5-year useful life with a $3,300 salvage value. Prepare a tabular summary to record all transactions described on the above dates. Depreciation was last recorded on December 31, 2021. Update depreciation on assets disposed of, where applicable. Novak Corporation uses straight-line depreciation. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset. Liability or Equity item that was reduced.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Topic Video
Question
Vishu
Transcribed Image Text:Here are selected 2022 transactions of Novak Corporation.
Jan. 1
June
30
Dec.
31
Jan. 1
June 30
Retired a piece of machinery that was purchased on January 1, 2012. The machine cost $61,400 and had a useful life
of 10 years with no salvage value.
Prepare a tabular summary to record all transactions described on the above dates. Depreciation was last recorded on December 31,
2021. Update depreciation on assets disposed of, where applicable. Novak Corporation uses straight-line depreciation. (If a transaction
causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the
particular Asset, Liability or Equity item that was reduced.)
Dec. 31
Sold a computer that was purchased on January 1, 2020. The computer cost $35,600 and had a useful life of 4 years with
no salvage value. The computer was sold for $4,700 cash.
Sold a delivery truck for $9,500 cash. The truck cost $24,100 when it was purchased on January 1, 2019, and was
depreciated based on a 5-year useful life with a $3,300 salvage value.
$
LA
Cash
tA
Assets
Equipment
-61,400
tA
$
Accum. Depr. - Equip.
61,400
Liabilities +
+
$
CA
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education