Question

he following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents.

2018
January		2		Paid $105,000 cash to purchase storage shed components.
January		3		Paid $4,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $7,000.
April		1		Paid $51,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $5,000.
May		13		Paid $900 cash for minor repairs to the pickup truck's upholstery.
July		1		Paid $10,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years.
December		31		Recorded depreciation and amortization on the pickup truck, storage shed, and patent.
2019
June		30		Sold the pickup truck for $43,000 cash. (Record the depreciation on the truck prior to recording its disposal.)
December		31		Recorded depreciation on the storage shed. Also determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero).

Answer 1

SLM - Truck
Year	Depreciable cost	Depreciation rate	No. of Months	DepreciationExpense	Accumulated Depreciation	Carrying Amount
2018	$            46,000.00	20%	9.00	$                        6,900.00	$                                   6,900.00	$            44,100.00
2019	$            46,000.00	20%	6.00	$                        4,600.00	$                                 11,500.00	$            39,500.00

DDM - Shed
Year	Carrying amount Beg of year	Depreciation rate	No. of Months	DepreciationExpense	Accumulated Depreciation	Carrying Amount
2019	$                                 1,09,000.00	20%	12.00	$                      21,800.00	$                                 21,800.00	$            87,200.00
2020	$                                    87,200.00	20%	12.00	$                      17,440.00	$                                 39,240.00	$            69,760.00

Date		Debit	Credit
Jan-02	Storage Shed	$ 1,05,000.00
	Cash		$   1,05,000.00
Jan-03	Storage Shed	$       4,000.00
	Cash		$         4,000.00
Apr-01	Pickup Truck	$     51,000.00
	Cash		$       51,000.00
May-13	Repairs and Maintenance	$           900.00
	Cash		$             900.00
Jul-01	Patent	$     10,000.00
	Cash		$       10,000.00
Dec-31	Depreciation - Storage shed	$     21,800.00
	Accumulated depreciation storage shed		$       21,800.00
Dec-31	Depreciation - Truck	$       6,900.00
	Accumulated depreciation storage Truck		$         6,900.00
Dec-31	Amortization	$       2,000.00
	Patent		$         2,000.00
Jun-30	Cash	$     43,000.00
	Depreciation - Truck	$       4,600.00
	Accumulated depreciation storage Truck	$       6,900.00
	Gain on sale of Truck		$         3,500.00
	Truck		$       51,000.00
Dec-31	Depreciation - Storage shed	$     17,440.00
	Accumulated depreciation storage shed		$       17,440.00
Dec-31	Impairment loss	$       8,000.00
	Patent		$         8,000.00