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The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents. 2018 January 2 Paid $91,000 cash to purchase storage shed components. January 3 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 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. May 13 Paid $600 cash for minor repairs to the pickup truck's upholstery. July 1 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 Recorded depreciation and amortization on the pickup truck, storage shed, and patent. 2019 June 30 Sold the pickup truck for $29,000 cash. (Record the depreciation on the truck prior to recording its disposal.) December 31 Recorded depreciation on the storage shed. Also 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 during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents. 2018 January 2 Paid $91,000 cash to purchase storage shed components. January 3 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 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. May 13 Paid $600 cash for minor repairs to the pickup truck's upholstery. July 1 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 Recorded depreciation and amortization on the pickup truck, storage shed, and patent. 2019 June 30 Sold the pickup truck for $29,000 cash. (Record the depreciation on the truck prior to recording its disposal.) December 31 Recorded depreciation on the storage shed. Also 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.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents. 2018 January 2 Paid $91,000 cash to purchase storage shed components. January 3 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 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. May 13 Paid $600 cash for minor repairs to the pickup truck's upholstery. July 1 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 Recorded depreciation and amortization on the pickup truck, storage shed, and patent. 2019 June 30 Sold the pickup truck for $29,000 cash. (Record the depreciation on the truck prior to recording its disposal.) December 31 Recorded depreciation on the storage shed. Also 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.) X Answer is not complete.
Transcribed Image Text:The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents. 2018 January 2 Paid $91,000 cash to purchase storage shed components. January 3 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 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. May 13 Paid $600 cash for minor repairs to the pickup truck's upholstery. July 1 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 Recorded depreciation and amortization on the pickup truck, storage shed, and patent. 2019 June 30 Sold the pickup truck for $29,000 cash. (Record the depreciation on the truck prior to recording its disposal.) December 31 Recorded depreciation on the storage shed. Also 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.) X Answer is not complete.
No 1 2 3 4 5 6 7 8 9 10 11 12 Date January 02, 2018 Building Cash January 03, 2018 Building Cash April 01, 2018 May 13, 2018 July 01, 2018 June 30, 2019 Equipment Cash June 30, 2019 Repairs and Maintenance Expense Cash Patent December 31, 201| Depreciation Expense Cash Accumulated Depreciation Buildings Depreciation Expense Accumulated Depreciation-Equipment Cash Loss on Disposal General Journal Accumulated Depreciation-Equipment Equipment December 31, 201| Depreciation Expense Accumulated Depreciation-Buildings December 31, 201 Amortization Expense Accumulated Amortization December 31, 201| Amortization Expense Accumulated Amortization December 31, 201 Impairment Loss Accumulated Depreciation Equipment X Debit 91,000 X X 2,000 34,000 600 24,000 18,600 X 3,100 29,000 X 12,750 X X 14,880 4,800 4,800 X 16,800 Credit 91,000 2,000 34,000 600 24,000 18,600 X 3,100 7,750 X 34,000 14,880 4,800 4,800 16,800
Transcribed Image Text:No 1 2 3 4 5 6 7 8 9 10 11 12 Date January 02, 2018 Building Cash January 03, 2018 Building Cash April 01, 2018 May 13, 2018 July 01, 2018 June 30, 2019 Equipment Cash June 30, 2019 Repairs and Maintenance Expense Cash Patent December 31, 201| Depreciation Expense Cash Accumulated Depreciation Buildings Depreciation Expense Accumulated Depreciation-Equipment Cash Loss on Disposal General Journal Accumulated Depreciation-Equipment Equipment December 31, 201| Depreciation Expense Accumulated Depreciation-Buildings December 31, 201 Amortization Expense Accumulated Amortization December 31, 201| Amortization Expense Accumulated Amortization December 31, 201 Impairment Loss Accumulated Depreciation Equipment X Debit 91,000 X X 2,000 34,000 600 24,000 18,600 X 3,100 29,000 X 12,750 X X 14,880 4,800 4,800 X 16,800 Credit 91,000 2,000 34,000 600 24,000 18,600 X 3,100 7,750 X 34,000 14,880 4,800 4,800 16,800
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