The question is the instructions part 487Chapter 9 Long-Term Assets: Fixed and IntangibleYear 2Jan. 6. Purchased a new truck for $60,000, paying cash.1. Sold the used truck for $14,000. (Record depreciation to date in Year 2 for the truck.)Apr.June 11. Paid garage $280 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 offive years.Year 3July 1. Purchased a new truck for $65,000, paying cash.2. Sold the truck purchased January 6, Year 2, for $19,520. (Record depreciation to date for Year 3 for the truck.)Oct.Dec. 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $6,000 and an estimateduseful life of eight years.InstructionsJournalize the transactions and the adjusting entries. PR 9-5A Transactions for fixed assets, including saleThe following transactions and adjusting entries were completed by Legacy Furniture Co. duringa three-year period. All are related to the use of delivery equipment. The double-declining-balancemethod of depreciation is used.Obj. 1, 2, 3Year 1Jan. 4. Purchased a used delivery truck for $26,000, paying cash.Nov. 2. Paid garage $825 for miscellaneous repairs to the truck.Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with aresidual value of $2,000 for the truck.

Depreciation Expense = 2 x Straight Line Depreciation Rate x Book Value Straight Line Depreciation Rate = 1Useful LifeDate Accounts Title Debit Credit Year 1 04-Jan Delivery Truck 26,000 Cash 26,000 02-Nov Truck Repairs and Maintenance Expense 825 Cash 825 31-Dec Depreciation Expense- Delivery Truck 13,000 Accumulated Depreciation- Delivery Truck 13,000 Year 2 06-Jan Delivery Truck 60,000 Cash 60,000 01-Apr Depreciation Expense- Delivery Truck 1,625 Accumulated Depreciation- Delivery Truck 1,625 01-Apr Cash 14,000 Accumulated Depreciation- Delivery Truck 14,625 Delivery Truck 26,000 Gain on Sale of Delivery Truck 2,625 11-Jun Truck Repairs and Maintenance Expense 280 Cash 280 31-Dec Depreciation Expense- Delivery Truck 24,000 Accumulated Depreciation- Delivery Truck 24,000 Year 3 01-Jul Delivery Truck 65,000 Cash 65,000 02-Oct Depreciation Expense- Delivery Truck 10,800 Accumulated Depreciation- Delivery Truck 10,800 02-Oct Cash 19,520 Accumulated Depreciation- Delivery Truck 34,800 Loss on Sale of Delivery Truck 5,680 Delivery Truck 60,000 31-Dec Depreciation Expense- Delivery Truck 8,125 Accumulated Depreciation- Delivery Truck 8,125 Workings Depreciation Workings for Used Truck purchased during Year 1 Year Beginning Book Value Rate Number of Months Depreciation Expense Ending Book Value 1 26,000 50% 12 13,000 13,000 2 13,000 50% 3 1,625 11,375 Depreciation Rate = 2 x (1/4) = 50% Depreciation Workings for Truck purchased during Year 2 Year Beginning Book Value Rate Number of Months Depreciation Expense Ending Book Value 2 60,000 40% 12 24,000 36,000 3 36,000 40% 9 10,800 25,200 Depreciation Rate = 2 x (1/5) = 40% Depreciation Workings for Truck purchased during Year 3 Year Beginning Book Value Rate Number of Months Depreciation Expense Ending Book Value 3 65,000 25% 6 8,125 56,875 Depreciation Rate = 2 x (1/8) = 25%