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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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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