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Transactions for fixed assets, including sale The following transactions and adjusting entries were completed by Robinson Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. Year 1 Jan. 8. Purchased a used delivery truck for $24,000, paying cash. Mar. 7. Paid garage $900for changing the oil, replacing the oil filter, and tuning the engine on the delivery truck. Dec. 31. Recorded depreciation on the truck for the fiscal year. The estimated useful life of the truck is four years, with a residual value of $4,000 for the truck. Year 2 Jan. 9. Purchased a new truck for $50,000, paying cash. Feb. 28. Paid garage $250 to tune the engine and make other minor repairs on the used truck. Apr. 30. Sold the used truck for $9,500. (Record depreciation to date in Year 2 for the truck.) Dec. 31. Record depreciation for the new truck. It has an estimated residual value of $12,000 and an estimated life of eight years. Year 3 Sept. 1. Purchased a new truck for $58,500, paying cash. 4. Sold the truck purchased January 9, Year 2, for $36,000. (Record depreciation toddle for Year 3 for the truck) Dec. 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $16,000 and an estimated useful life of 10 years. Instructions Journalize the transactions and the adjusting entries.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 10, Problem 10.5BPR
Textbook Problem

Transactions for fixed assets, including sale

The following transactions and adjusting entries were completed by Robinson Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used.

Year 1  
Jan. 8. Purchased a used delivery truck for $24,000, paying cash.
Mar. 7. Paid garage $900for changing the oil, replacing the oil filter, and tuning the engine on the delivery truck.
Dec. 31. Recorded depreciation on the truck for the fiscal year. The estimated useful life of the truck is four years, with a residual value of $4,000 for the truck.
Year 2  
Jan. 9. Purchased a new truck for $50,000, paying cash.
Feb. 28. Paid garage $250 to tune the engine and make other minor repairs on the used truck.
Apr. 30. Sold the used truck for $9,500. (Record depreciation to date in Year 2 for the truck.)
Dec. 31. Record depreciation for the new truck. It has an estimated residual value of $12,000 and an estimated life of eight years.
Year 3  
Sept. 1. Purchased a new truck for $58,500, paying cash.
4. Sold the truck purchased January 9, Year 2, for $36,000. (Record depreciation toddle for Year 3 for the truck)
Dec. 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $16,000 and an estimated useful life of 10 years.

Instructions

Journalize the transactions and the adjusting entries.

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Chapter 10 Solutions

Accounting
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