Cullumber Company had the following assets on January 1, 2022.Useful Life(in years)Salvage Value$ 0ItemCostPurchase DateMachinery$72,000Jan. 1, 201210Forklift31,000Jan. 1, 2019Truck37,400Jan. 1, 20178.3,000During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold onJune 30 for $12,100. The truck was discarded on December 31.Journalize all entries required on the above dates, indluding entries to update depreciation, where applicable, on disposedassets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (Creditaccount titles are automatically indented when the amount is entered. Do not indent manually. If no entry isrequired, select "No Entry" for the account titles and enter 0 for the amounts.)DateAccount Titles and ExplanationDebitCredit(To record depreciation expense on forklift)(To record sale of forklift)(To record depreciation expense on truck) Useful LifeItemCostPurchase Date(in years)Salvage ValueMachinery$72,000Jan. 1, 201210$ 0Forklift31,000Jan. 1, 2019Truck37,400Jan. 1, 20178.3,000During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold onJune 30 for $12,100. The truck was discarded on December 31.Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposedassets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (Creditaccount titles are automatically indented when the amount is entered. Do not indent manually. If no entry isrequired, select "No Entry" for the account titles and enter 0 for the amounts.)DateAccount Titles and ExplanationDebitCredit(To record depreciation expense on forklift)(To record sale of forklift)(To record depreciation expense on truck)(To record sale of truck)<>

Name: Cullumber Company had the following assets on January 1, 2022.Useful
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Cullumber Company had the following assets on January 1, 2022.Useful Life(in years)Salvage Value$ 0ItemCostPurchase DateMachinery$72,000Jan. 1, 201210Forklift31,000Jan. 1, 2019Truck37,400Jan. 1, 20178.3,000During 2022, each of the assets was removed

Solution:- Journal entries in the books of "Cullumber" company as follows:-

Business

Accounting

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 $12,100. The truck was discarded on December 31. Journalize all entries required on the above dates, indluding 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 0 for the amounts.)

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 $12,100. The truck was discarded on December 31. Journalize all entries required on the above dates, indluding 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 0 for the amounts.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 10E: Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual...

See similar textbooks

Similar questions

Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
Grandorf Company replaced the engine in a truck for 8,000 and expects the new engine will extend the life of the truck two years beyond the original estimated life. Related information is provided below. Cost of truck 65,000 Salvage value 5,000 Original estimated life 6 years The truck was purchased on January 1, 20-1. The engine was replaced on January 1, 20-6. Using straight-line depreciation, compute depreciation expense for 20-6.
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?
During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.