Question

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 $48,600, paying cash.
Mar. 7.	Paid garage $140 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 9 years, with a residual value of $10,200 for the truck.
Year 2
Jan. 9.	Purchased a new truck for $55,860, 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 $33,600. (Record depreciation to date in Year 2 for the truck.)
Dec. 31.	Record depreciation for the new truck. It has an estimated trade-in value of $10,100 and an estimated life of 7 years.
Year 3
Sept. 1.	Purchased a new truck for $93,000, paying cash.
Sept. 4.	Sold the truck purchased January 9, Year 2, for $34,000. (Record depreciation to date in Year 3 for the truck.)
Dec. 31.	Recorded depreciation on the remaining truck. It has an estimated residual value of $16,700 and an estimated useful life of 10 years.

Required:

Journalize the transactions and the adjusting entries. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations. Round your final answers to the nearest cent.

Year 1 Jan. 8
Mar. 7
Dec. 31
Year 2 Jan. 9
Feb. 28
Apr. 30-Deprec.
Apr. 30-Sale
Dec. 31
Year 3 Sept. 1
Sept. 4-Deprec.
Sept. 4-Sale
Dec. 31

Answer 1

Year 1

1. Jan 8

Delievery Truck Dr. 48600

To Cash 48600

2. March 7

Truck repair expense Dr. 140

To cash 140

3. December 31

Depreciation expense Dr. 10800

To accumulated depreciation 10800

(2/9 * 48,600)

Year 2

4. January 9

Delievery Truck Dr. 55860

To cash 55860

5. Feb 28

Truck repair expense Dr. 250

To cash 250

6. April 30

Depreciation expense Dr. 2800

To accumulated depreciation 2800

[2/9 * (48600 - 10800)] * 4/12months

7. April 30

Accumulated Depreciation Dr. 13600

Cash Dr. 33600

Loss on sale (b/f) 1400

To Delievery truck 48600

8. December 31

Depreciation expense Dr. 15960

To accumulated depreciation 15960

(2/7 * 55860)

Year 3

9. September 1

Delievery Truck Dr. 93000

To cash 93000

10. September 4

Depreciation expense Dr. 7600

To accumulated depreciation 7600

[2/7 * (55860-15960) * 8/12months]

11. September 4

Accumulated depreciation Dr. 23560

Cash Dr. 34000

To delievery truck 55860

To Gain on sale (b/f) 1700

12. December 31

Depreciation expense Dr. 6200

To accumulated depreciation 6200

[2/10 * 93000] * 4/12 months