Wildhorse Co. had the following assets on January 1, 2022. Item Machinery Forklift Truck Cost $68,000 27,000 33,400 Purchase Date Jan. 1, 2012 Jan. 1, 2019 Jan. 1, 2017 Useful Life (in years) 10 5 8 Salvage Value $0 0 3,000 During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $11,700. The truck was discarded on December 31. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (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 titles and enter o for the amounts.)
Wildhorse Co. had the following assets on January 1, 2022. Item Machinery Forklift Truck Cost $68,000 27,000 33,400 Purchase Date Jan. 1, 2012 Jan. 1, 2019 Jan. 1, 2017 Useful Life (in years) 10 5 8 Salvage Value $0 0 3,000 During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $11,700. The truck was discarded on December 31. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (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 titles and enter o for the amounts.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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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Transcribed Image Text:Wildhorse Co. had the following assets on January 1, 2022.
Item
Machinery
Forklift
Truck
Date
Cost
$68,000
27,000
33,400
Jan. 1
Purchase Date
Jan. 1, 2012
Jan. 1, 2019
Jan. 1, 2017
During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June
30 for $11,700. The truck was discarded on December 31.
June 30
Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets.
The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (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 titles
and enter O for the amounts.)
Useful Life
(in years)
10
5
8
Account Titles and Explanation
Accumulated Depreciation-Equipment
Equipment
Depreciation Expense
Salvage Value
$0
0
3,000
Accumulated Depreciation-Equipment
Debit
68,000
2700
Credit
68,000
2700
Transcribed Image Text:June 30
Dec. 31
Dec. 31
V
(To record depreciation expense on forklift)
Cash
Accumulated Depreciation-Equipment
Gain on Disposal of Plant Assets
Equipment
(To record sale of forklift)
Depreciation Expense
Accumulated Depreciation-Equipment
(To record depreciation expense on truck)
Loss on Disposal of Plant Assets
Accumulated Depreciation-Equipment
Equipment
(To record sale of truck)
11700
18900
3800
22800
10600
3600
27000
3800
33400
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