Question

Presented below are selected transactions at Ridge Company for 2015.

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2005. The machine cost $60,190 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, 2012. The computer cost $37,090. It had a useful life of 5 years with no salvage value. The computer was sold for $14,160.

Dec. 31 Discarded a delivery truck that was purchased on January 1, 2011. The truck cost $37,100. It was depreciated based on a 6-year useful life with a $3,680 salvage value.

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ridge Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2014.)

Date

Account Titles and Explanation

Debit

Credit

Answer 1

Date	Account explanation	Debit	Credit
Jan 1,2015	Accumulated Depreciation-Machine	$                       60,190
	Machine		$                             60,190
	(to machine retired after its useful life)
June 30, 2015	Depreciation expense-Computer($37090*20%*6/12)	$                         3,709
	Accumulated Depreciation-Computer		$                               3,709
	(to depreciation charged for 6 months)
June 30, 2015	Cash	$                       14,160
	Accumulated Depreciation-Computer	$                       25,963
	Gain on sale of Computer		$                               3,033
	Computer		$                             37,090
	(to computer sold at profit recorded)
Dec 31, 2015	Depreciation expense-Delivery Truck	$                         5,570
	Accumulated Depreciation-Delivery Truck		$                               5,570
	(to depreciation charged for 12 months)
Dec 31, 2015	Accumulated Depreciation-Delivery Truck	$                       27,850
	Loss on disposal	$                         9,250
	Delivery Truck		$                             37,100
	(to delivery truck discarded at loss)