Business, 06.05.2020 05:43 fredgk

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 $900 for 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.
Sept. 4. Sold the truck purchased January 9, Year 2, for $36,000. (Record depreciation to date 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.

Answers: 2

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Answer from: pstat

Year 1

Jan. 8. Purchased a used delivery truck for $24,000, paying cash.

Dr Truck 24,000 Cr Cash 24,000

Mar. 7. Paid garage $900 for changing the oil, replacing the oil filter, and tuning the engine on the delivery truck.

Dr Maintenance expenses - Truck 900 Cr Cash 900

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.

Depreciation expense = 2 x 0.25 x $24,000 = $12,000

Dr Depreciation expense 12,000 Cr Accumulated depreciation - truck 12,000

Year 2

Jan. 9. Purchased a new truck for $50,000, paying cash.

Dr Truck new 50,000 Cr Cash 50,000

Feb. 28. Paid garage $250 to tune the engine and make other minor repairs on the used truck.

Dr Maintenance expenses - Truck 250 Cr Cash 250

Apr. 30. Sold the used truck for $9,500. (Record depreciation to date in Year 2 for the truck.)

depreciation expense = 2 x 0.25 x 4/12 x $12,000 = $2,000

Dr Depreciation expense 2,000 Cr Accumulated depreciation - truck 2,000

truck sold at $9,500 - $10,000 (carrying value) = -$500 loss on sale

Dr Cash 9,500Dr Accumulated depreciation 14,000Dr Loss on sale - truck 500 Cr Truck 24,000

Dec. 31. Record depreciation for the new truck. It has an estimated residual value of $12,000 and an estimated life of eight years.

Depreciation expense = 2 x 0.125 x $50,000 = $12,500

Dr Depreciation expense 12,500 Cr Accumulated depreciation - truck new 12,500

Year 3

Sept. 1. Purchased a new truck for $58,500, paying cash.

Dr Truck three 58,500 Cr Cash 58,500

Sept. 4. Sold the truck purchased January 9, Year 2, for $36,000. (Record depreciation to date for Year 3 for the truck.)

Depreciation expense = 2 x 0.125 x 8/12 x $37,500 = $6,250

Dr Depreciation expense 6,250 Cr Accumulated depreciation - truck new 6,250

truck sold at $36,000 - $31,250 (carrying value) = $4,750 gain on sale

Dr Cash 36,000Dr Accumulated depreciation 18,750 Cr Truck new 50,000 Cr Gain on sale - truck new 4,750

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.

Depreciation expense = 2 x 0.1 x 4/12 x $58,500 = $3,900

Dr Depreciation expense 3,900 Cr Accumulated depreciation - truck three 3,900

Answer from: Quest

u = 30

continuing your method

$\frac{1}{10}$ = $\frac{1}{u}$ + $\frac{1}{15}$

subtract $\frac{1}{15}$ from both sides

$\frac{1}{u}$ = $\frac{1}{10}$ - $\frac{1}{15}$ thus

$\frac{1}{u}$ = $\frac{3}{30}$ - $\frac{2}{30}$

$\frac{1}{u}$ = $\frac{1}{30}$ ⇒ u = 30

Answer from: Quest

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The following transactions and adjusting entries were completed by Robinson Furniture Co. during a t...