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 $47,040, paying cash.
Mar. 7.	Paid garage $220 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 7 years, with a residual value of $9,900 for the truck.
Year 2
Jan. 9.	Purchased a new truck for $87,480, paying cash.
Feb. 28.	Paid garage $320 to tune the engine and make other minor repairs on the used truck.
Apr. 30.	Sold the used truck for $29,050. (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 $15,700 and an estimated life of 9 years.
Year 3
Sept. 1.	Purchased a new truck for $88,000, paying cash.
Sept. 4.	Sold the truck purchased January 9, Year 2, for $60,560. (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 $15,800 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	Delivery Truck
	Cash
Mar. 7	Truck Repair and Maintenance Expense
	Cash
Dec. 31	Depreciation Expense-Delivery Truck
	Accumulated Depreciation-Delivery Truck
Year 2, Jan. 9	Delivery Truck
	Cash
Feb. 28	Truck Repair and Maintenance Expense
	Cash
Apr. 30-Deprec.	Depreciation Expense-Delivery Truck
	Accumulated Depreciation-Delivery Truck
Apr. 30-Sale	Accumulated Depreciation-Delivery Truck
	Cash
	Loss on Sale of Delivery Truck
	Delivery Truck
Dec. 31	Depreciation Expense-Delivery Truck
	Accumulated Depreciation-Delivery Truck
Year 3, Sept. 1	Delivery Truck
	Cash
Sept. 4-Deprec.	Depreciation Expense-Delivery Truck
	Accumulated Depreciation-Delivery Truck
Sept. 4-Sale	Cash
	Accumulated Depreciation-Delivery Truck
	Delivery Truck
	Gain on Sale of Delivery Truck
Dec. 31	Depreciation Expense-Delivery Truck
	Accumulated Depreciation-Delivery Truck

Answer 1

Journal Entries of Robinson furniture Co.

1. Jan-8 Truck A/C Dr.   $47,040

                 To Cash                       $47,040

              ( Purchased Used Truck )

2. Mar-7 Repair and Maintenance A/C Dr. $220

                  To, Cash                                          $220

               ( Repair and Maintanance amount Paid )

3. Dec-31 Depreciation A/C Dr.   $13,440

                   To, Accumulated Depreaciation         $13,440

              ( Depreciation amount under DDB method for 1 year )

4. Jan-9 Truck A/C Dr.   $87,480

                 To Cash                       $87,480

                 ( Purchased New Truck )

5. Feb-28 Repair and Maintenance A/C Dr. $320

                  To, Cash                                          $320

               ( Repair and Maintanance amount Paid )

6. Apr-30   Depreciation A/C Dr.   $3,200

                   To, Accumulated Depreaciation         $3,200

              ( Depreciation amount under DDB method for 4 months )

7. Apr-30 Cash A/C                                  Dr.    $29,050

               Accumulated Depreciation A/C    Dr.    $16,640

               Loss on sale of Delivery of Truck A/C Dr.    $1,350

                     To, Truck                                                         $47,040

                 ( Sale of Used Truck )

8. Dec-31 Depreciation A/C Dr.   $19,440

                   To, Accumulated Depreaciation         $19,440

              ( Depreciation amount under DDB method for 1 year )

9. Sep-1 Truck A/C Dr.   $88,000

                 To Cash                       $88,000

              ( Purchased New Truck )

10. Sep-4 Depreciation A/C Dr.   $10,080

                   To, Accumulated Depreaciation         $10,080

              ( Depreciation amount under DDB method for 8 months )

11. Sep-4 Cash A/C                                   Dr.    $60,560

               Accumulated Depreciation A/C     Dr.    $29,520

                     To, Gain on Sale of Delivery Truck                     $2,600

                     To, Truck                                                         $87,480

                  ( Sale of New Truck Purchased on 2nd Year, Jan-9 )

12. Dec-31 Depreciation A/C Dr.   $5,867

                  To, Accumulated Depreaciation         $5,867

              ( Depreciation amount under DDB method for 4 Months )