In: Accounting
Presented below are selected transactions at Blue Spruce Company
for 2020.
Jan. | 1 | Retired a piece of machinery that was purchased on January 1, 2010. The machine cost $62,400 on that date. It had a useful life of 10 years with no salvage value. | |
June | 30 | Sold a computer that was purchased on January 1, 2017. The computer cost $42,900. It had a useful life of 5 years with no salvage value. The computer was sold for $15,100. | |
Dec. | 31 | Discarded a delivery truck that was purchased on January 1, 2016. The truck cost $35,340. It was depreciated based on a 6-year useful life with a $3,000 salvage value. |
Journalize all entries required on the above dates, including
entries to update depreciation, where applicable, on assets
disposed of. Blue Spruce Company uses straight-line depreciation.
(Assume depreciation is up to date as of December 31, 2019.)
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. Record journal entries
in the order presented in the problem. If no entry is required,
select "No Entry" for the account titles and enter 0 for the
amounts.)
Date |
Account Titles and Explanation |
Debit |
Credit |
|
Jan. 1June 30Dec. 31 |
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Jan. 1June 30Dec. 31 |
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(To record depreciation to date of disposal) |
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|
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(To record sale of computer) |
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Jan. 1June 30Dec. 31 |
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(To record depreciation to date of disposal) |
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Dec. 31 |
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(To record retirement of truck) |
Answer | ||||
Date | Accounts title | Debit | Credit | |
01-Jan-17 | Accumulated Depreciation | $ 62,400 | 62400*10/10 | |
Equipment | $ 62,400 | |||
30-Jun | Depreciation expense | $ 4,290 | 42900/5*6/12 | |
Accumulated Depreciation | $ 4,290 | |||
30-Jun | Cash | $ 15,100 | ||
Accumulated Depreciation | $ 30,030 | 42900/5*3.5 | ||
Gain on disposal of plant assets | $ 2,230 | |||
Equipment | $ 42,900 | |||
31-Dec | Depreciation expense | $ 5,390 | (35340-3000)/6 | |
Accumulated Depreciation | $ 5,390 | |||
31-Dec | Accumulated Depreciation | $ 26,950 | (35340-3000)*5/6 | |
Loss on disposal of plant assets | $ 8,390 | 35340-26950 | ||
Equipment | $ 35,340 | |||