The following transactions and adjusting entries were completed by Legacy Furniture Co. during a 3-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. Year 1 Jan. 4. Purchased a used delivery truck for $32,000, paying cash. Nov. 2. Paid garage $950 for miscellaneous repairs to the truck. Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is 4 years, with a residual value of $2,000 for the truck. Year 2 Jan. 6. Purchased a new truck for $80,000, paying cash. Apr. 1. Sold the used truck for $16,000. (Record depreciation to date in Year 2 for the truck.) June 11. Paid garage $310 for miscellaneous repairs to the truck. Dec. 31. Record depreciation for the new truck. It has an estimated residual value of $7,000 and an estimated life of 5 years. Year 3 July 1. Purchased a new truck for $85,000, paying cash. Oct. 2. Sold the truck purchased January 6, Year 2, for $18,250. (Record depreciation to date for Year 3 for the truck.) Dec. 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $6,000 and an estimated useful life of 8 years. Required: Journalize the transactions and the adjusting entries.
The following transactions and adjusting entries were completed by Legacy Furniture Co. during a 3-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. Year 1 Jan. 4. Purchased a used delivery truck for $32,000, paying cash. Nov. 2. Paid garage $950 for miscellaneous repairs to the truck. Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is 4 years, with a residual value of $2,000 for the truck. Year 2 Jan. 6. Purchased a new truck for $80,000, paying cash. Apr. 1. Sold the used truck for $16,000. (Record depreciation to date in Year 2 for the truck.) June 11. Paid garage $310 for miscellaneous repairs to the truck. Dec. 31. Record depreciation for the new truck. It has an estimated residual value of $7,000 and an estimated life of 5 years. Year 3 July 1. Purchased a new truck for $85,000, paying cash. Oct. 2. Sold the truck purchased January 6, Year 2, for $18,250. (Record depreciation to date for Year 3 for the truck.) Dec. 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $6,000 and an estimated useful life of 8 years. Required: Journalize the transactions and the adjusting entries.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The following transactions and adjusting entries were completed by Legacy Furniture Co. during a 3-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used.
| Year 1 | |
| Jan. 4. | Purchased a used delivery truck for $32,000, paying cash. |
| Nov. 2. | Paid garage $950 for miscellaneous repairs to the truck. |
| Dec. 31. | Recorded depreciation on the truck for the year. The estimated useful life of the truck is 4 years, with a residual value of $2,000 for the truck. |
| Year 2 | |
| Jan. 6. | Purchased a new truck for $80,000, paying cash. |
| Apr. 1. | Sold the used truck for $16,000. (Record depreciation to date in Year 2 for the truck.) |
| June 11. | Paid garage $310 for miscellaneous repairs to the truck. |
| Dec. 31. | Record depreciation for the new truck. It has an estimated residual value of $7,000 and an estimated life of 5 years. |
| Year 3 | |
| July 1. | Purchased a new truck for $85,000, paying cash. |
| Oct. 2. | Sold the truck purchased January 6, Year 2, for $18,250. (Record depreciation to date for Year 3 for the truck.) |
| Dec. 31. | Recorded depreciation on the remaining truck. It has an estimated residual value of $6,000 and an estimated useful life of 8 years. |
| Required: | |
| Journalize the transactions and the adjusting entries. |
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