Sandhill Co. had the following assets on January 1, 2017. Useful Life (in years) Salvage Value $0 Item Cost Purchase Date Machinery $65,320 Jan. 1, 2007 10 Forklift 27,600 Jan. 1, 2014 Truck 30,728 Jan. 1, 2012 2,760 During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $11,040. The truck was discarded on Decem Journalize all entries required on the above dates, induding entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All dep (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 titl
Sandhill Co. had the following assets on January 1, 2017. Useful Life (in years) Salvage Value $0 Item Cost Purchase Date Machinery $65,320 Jan. 1, 2007 10 Forklift 27,600 Jan. 1, 2014 Truck 30,728 Jan. 1, 2012 2,760 During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $11,040. The truck was discarded on Decem Journalize all entries required on the above dates, induding entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All dep (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 titl
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Sandhill Co. had the following assets on January 1, 2017.
Useful Life
(in years)
Salvage Value
$0
Cost
Purchase Date
Item
10
Machinery
$65,320
Jan. 1, 2007
5
Forklift
27,600
Jan. 1, 2014
8.
2,760
30,728
Jan. 1, 2012
Truck
During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $11,040. The truck was discarded on Decemb
Journalize all entries required on the above dates, induding entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depr
(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 title
Debit
Credit
Date
Account Titles and Explanation
(To record depreciation expense on forklift)
June 30
(To record sale of forklift)
(To record depreciation expense on truck)
Dec. 31
(To record sale of truck)
Transcribed Image Text:Kimmel, Financial Accounting, 8e
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andhill Co. had the following assets on January 1, 2017.
Useful Life
(in years)
Item
Cost
Purchase Date
Salvage Value
achinery
$65,320
Jan. 1, 2007
orklift
009'27
Jan. 1, 2014
Jan. 1, 2012
5.
uck
30,728
2,760
uring 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift wa
urnalize all entries required on the above dates, including entries to update depreciation, where applicable, on dis
redit account titles are automatically indented when the amount is entered. Do not indent manually. 1
Date
Account Titles and Explanation
Debit
Credit
(To record depreciation expense on forklift)
June 30
(To record sale of forklift)
(To record depreciation expense on truck)
Dec. 31
(To record sale of truck)
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