Here are selected 2022 transactions of Sunland Company. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2012. The machine cost $62,100 and had a useful life of 10 years with no salvage value. June 30 Sold a computer that was purchased on January 1, 2020. The computer cost $38,400 and had a useful life of 3 years with no salvage value. The computer was sold for $6,000 cash. Dec. 31 Sold a delivery truck for $10,000 cash. The truck cost $32,100 when it was purchased on January 1, 2019, and was depreciated based on a 5-year useful life with a $3,000 salvage value. Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Sunland Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2021). (Credit account titles are automatically indented whe
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.
Here are selected 2022 transactions of Sunland Company.
| Jan. | 1 | Retired a piece of machinery that was purchased on January 1, 2012. The machine cost $62,100 and had a useful life of 10 years with no salvage value. | |
| June | 30 | Sold a computer that was purchased on January 1, 2020. The computer cost $38,400 and had a useful life of 3 years with no salvage value. The computer was sold for $6,000 cash. | |
| Dec. | 31 | Sold a delivery truck for $10,000 cash. The truck cost $32,100 when it was purchased on January 1, 2019, and was |
Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Sunland Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2021). (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record
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Account Titles and Explanation
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choose a transaction date
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enter an account title
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enter a debit amount
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enter a credit amount
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enter an account title
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enter a debit amount
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enter a credit amount
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choose a transaction date
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enter an account title to record the depreciation to date of disposal
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enter a debit amount
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enter a credit amount
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enter an account title to record the depreciation to date of disposal
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enter a debit amount
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enter a credit amount
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(To record depreciation to date of disposal)
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enter an account title to record the sale of the computer on June 30
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enter a debit amount
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enter a credit amount
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enter an account title to record the sale of the computer on June 30
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enter a debit amount
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enter a credit amount
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enter an account title to record the sale of the computer on June 30
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enter a debit amount
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enter a credit amount
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enter an account title to record the sale of the computer on June 30
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enter a debit amount
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enter a credit amount
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(To record sale of computer)
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choose a transaction date
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enter an account title to record the depreciation to date of disposal
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enter a debit amount
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enter a credit amount
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enter an account title to record the depreciation to date of disposal
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enter a debit amount
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enter a credit amount
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(To record depreciation to date of disposal)
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enter an account title to record the retirement of the truck on December 31
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enter a debit amount
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enter a credit amount
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enter an account title to record the retirement of the truck on December 31
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enter a debit amount
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enter a credit amount
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enter an account title to record the retirement of the truck on December 31
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enter a debit amount
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enter a credit amount
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enter an account title to record the retirement of the truck on December 31
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enter a debit amount
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enter a credit amount
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(To record retirement of truck)
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