Your answer is partially correct. Wildhorse Excavations Ltd. (WEL) operates specialized equipment for installing natural gas pipelines. WEL, which has a December 31 year end, began 2024 with a single piece of equipment that had been purchased on January 1, 2021, for $41,000 and a truck that had been purchased on January 1, 2023, for $70,000. When the equipment was purchased, WEL's management had estimated that the equipment would have a residual value of $5,000 and a useful life of six years. When the truck was purchased, management determined that it would have a useful life of four years and a residual value of $4,000. On March 31, 2024, WEL sold this piece of equipment for $30,000 cash. On April 12, 2024, WEL purchased replacement equipment with double the capacity for $78,400 cash. WEL's management determined that this equipment would have a useful life of six years and a residual value of $10,000 Prepare all necessary journal entries for the year ended December 31, 2024. Assume that WEL uses the straight-line depreciation method for its equipment and the double-diminishing-balance method for its trucks. (Record entries in the order displayed in the problem statement. 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. List all debit entries before credit entries) Date Mar 31/2024 V Mar 31/2024 V Apr 12/2024 V Apr 12/2024 V Dec. 31/2024 V Account Titles and Explanation Depreciation Expense Accumulated Depreciation Equipment (To record depreciation expense) Cash Equipererit (To record sale of equipment) Depreciation Expense Accumulated Depreciation Equipment (To record depreciation expense on equipment) Depreciation Expense Accumulated Depreciation-Trucks (To record depreciation expense on truck) Debit 30,000 TOONO 17.500 Credit
Your answer is partially correct. Wildhorse Excavations Ltd. (WEL) operates specialized equipment for installing natural gas pipelines. WEL, which has a December 31 year end, began 2024 with a single piece of equipment that had been purchased on January 1, 2021, for $41,000 and a truck that had been purchased on January 1, 2023, for $70,000. When the equipment was purchased, WEL's management had estimated that the equipment would have a residual value of $5,000 and a useful life of six years. When the truck was purchased, management determined that it would have a useful life of four years and a residual value of $4,000. On March 31, 2024, WEL sold this piece of equipment for $30,000 cash. On April 12, 2024, WEL purchased replacement equipment with double the capacity for $78,400 cash. WEL's management determined that this equipment would have a useful life of six years and a residual value of $10,000 Prepare all necessary journal entries for the year ended December 31, 2024. Assume that WEL uses the straight-line depreciation method for its equipment and the double-diminishing-balance method for its trucks. (Record entries in the order displayed in the problem statement. 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. List all debit entries before credit entries) Date Mar 31/2024 V Mar 31/2024 V Apr 12/2024 V Apr 12/2024 V Dec. 31/2024 V Account Titles and Explanation Depreciation Expense Accumulated Depreciation Equipment (To record depreciation expense) Cash Equipererit (To record sale of equipment) Depreciation Expense Accumulated Depreciation Equipment (To record depreciation expense on equipment) Depreciation Expense Accumulated Depreciation-Trucks (To record depreciation expense on truck) Debit 30,000 TOONO 17.500 Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Your answer is partially correct.
Wildhorse Excavations Ltd. (WEL) operates specialized equipment for installing natural gas pipelines. WEL, which has a December 31 year end, began 2024 with a single piece of equipment that had been purchased on January 1, 2021, for $41,000 and a truck that had been purchased on January 1, 2023, for $70,000. When the equipment was purchased, WEL's management had estimated that the equipment
would have a residual value of $5,000 and a useful life of six years. When the truck was purchased, management determined that it would have a useful life of four years and a residual value of $4,000.
On March 31, 2024, WEL sold this piece of equipment for $30,000 cash. On April 12, 2024, WEL purchased replacement equipment with double the capacity for $78,400 cash. WEL's management determined that this equipment would have a useful life of six years and a residual value of $10,000.
Prepare all necessary journal entries for the year ended December 31, 2024. Assume that WEL uses the straight-line depreciation method for its equipment and the double-diminishing-balance method for its trucks. (Record entries in the order displayed in the problem statement. 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. List all debit entries before credit entries.)
Date
Mar. 31/2024
Mar. 31/2024
Apr. 12/2024
Apr. 12/2024
Dec. 31/2024
Account Titles and Explanation
Depreciation Expense
Accumulated Depreciation - Equipment
(To record depreciation expense)
Cash
Equipment
(To record sale of equipment)
Depreciation Expense
Accumulated Depreciation - Equipment
(To record depreciation expense on equipment)
Depreciation Expense
Accumulated Depreciation - Trucks
(To record depreciation expense on truck)
Debit
30,000
17,500
Credit
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