Question

In: Accounting

Presented below are selected transactions at Blue Spruce Company for 2020. Jan. 1 Retired a piece...

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

Jan. 1June 30Dec. 31

(To record depreciation to date of disposal)

Jan. 1June 30Dec. 31

(To record sale of computer)

Jan. 1June 30Dec. 31

(To record depreciation to date of disposal)

Dec. 31

(To record retirement of truck)

Solutions

Expert Solution

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

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