The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents. January 2, 2020 Paid $91,000 cash to purchase storage shed components. January 3, 2020 April 1, 2020 May 13, 2020 July 1, 2020 December 31, 2020 June 30, 2021 December 31, 2021 Paid $2,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $5,000. Paid $34,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $3,000. This vehicle is to be recorded in the Truck account. Paid $600 cash for minor repairs to the pickup truck's upholstery. Paid $24,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years. Recorded depreciation and amortization on the pickup truck, storage shed, and patent. Sold the pickup truck for $29,000 cash. (Record the depreciation on the truck prior to recording its disposal.) Recorded depreciation on the storage shed. Recorded the patent amortization. After recording the patent amortization, determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero). 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.)
The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents. January 2, 2020 Paid $91,000 cash to purchase storage shed components. January 3, 2020 April 1, 2020 May 13, 2020 July 1, 2020 December 31, 2020 June 30, 2021 December 31, 2021 Paid $2,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $5,000. Paid $34,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $3,000. This vehicle is to be recorded in the Truck account. Paid $600 cash for minor repairs to the pickup truck's upholstery. Paid $24,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years. Recorded depreciation and amortization on the pickup truck, storage shed, and patent. Sold the pickup truck for $29,000 cash. (Record the depreciation on the truck prior to recording its disposal.) Recorded depreciation on the storage shed. Recorded the patent amortization. After recording the patent amortization, determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero). 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:### General Journal Entries
This table represents a series of general journal entries for various transactions and adjustments related to buildings, trucks, patents, and related expenses.
#### Table Breakdown:
- **Columns:**
- **No:** Transaction entry number.
- **Date:** Date of transaction.
- **General Journal:** Description of the transaction.
- **Debit:** Amount debited.
- **Credit:** Amount credited.
- **Rows:**
- **1 (January 02, 2020):**
- Buildings purchased for $91,000 (Debited).
- Cash paid $91,000 (Credited).
- **2 (January 03, 2020):**
- Buildings purchased for $2,000 (Debited).
- Cash paid $2,000 (Credited).
- **3 (April 01, 2020):**
- Truck purchased for $34,000 (Debited).
- Cash paid $34,000 (Credited).
- **4 (May 13, 2020):**
- Repairs and Maintenance Expense of $600 (Debited).
- Cash paid $600 (Credited).
- **5 (July 01, 2020):**
- Patents acquired for $24,000 (Debited).
- Cash paid $24,000 (Credited).
- **6 (December 31, 2020):**
- Depreciation Expense for a total of $18,600 (Debited).
- Amortization Expense recorded $18,600 (Credited).
- **7 (June 30, 2021):**
- Depreciation Expense booked for $4,650 (Debited).
- Accumulated Depreciation-Truck of $4,650 (Credited).
- **8 (June 30, 2021):**
- Cash received $2,400 (Debited).
- Accumulated Depreciation-Truck reduced by $2,400 (Credited).
- Truck disposal at $2,400 (Credited as Gain on Disposal of PPE).
- **9 (December 31, 2021):**
- Depreciation Expense recorded.
- Accumulated Depreciation-Buildings incurred.
- **10 (December 31,
Transcribed Image Text:The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents.
- January 2, 2020: Paid $91,000 cash to purchase storage shed components.
- January 3, 2020: Paid $2,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $5,000.
- April 1, 2020: Paid $34,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $3,000. This vehicle is to be recorded in the Truck account.
- May 13, 2020: Paid $600 cash for minor repairs to the pickup truck's upholstery.
- July 1, 2020: Paid $24,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years.
- December 31, 2020: Recorded depreciation and amortization on the pickup truck, storage shed, and patent.
- June 30, 2021: Sold the pickup truck for $29,000 cash. (Record the depreciation on the truck prior to recording its disposal.)
- December 31, 2021: Recorded depreciation on the storage shed. Recorded the patent amortization. After recording the patent amortization, determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero).
**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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