Question

Problem 9-3A

Carla Vista Co. had the following assets on January 1, 2017.

Item Cost Purchase Date Useful Life
(in years) Salvage Value
Machinery
$63,900 Jan. 1, 2007 10 $ 0
Forklift
27,000 Jan. 1, 2014 5 0
Truck
30,064 Jan. 1, 2012 8 2,704

During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $10,800. The truck was discarded on December 31.

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2016. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. 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
choose a transaction date

Jan. 1
June 30
Dec. 31
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
choose a transaction date

Jan. 1
June 30
Dec. 31
enter an account title to record depreciation expense on forklift
enter a debit amount
enter a credit amount
enter an account title to record depreciation expense on forklift
enter a debit amount
enter a credit amount
(To record depreciation expense on forklift)
June 30
enter an account title to record sale of forklift on June 30
enter a debit amount
enter a credit amount
enter an account title to record sale of forklift on June 30
enter a debit amount
enter a credit amount
enter an account title to record sale of forklift on June 30
enter a debit amount
enter a credit amount
enter an account title to record sale of forklift on June 30
enter a debit amount
enter a credit amount
(To record sale of forklift)
choose a transaction date

Jan. 1
June 30
Dec. 31
enter an account title to record depreciation expense on truck
enter a debit amount
enter a credit amount
enter an account title to record depreciation expense on truck
enter a debit amount
enter a credit amount
(To record depreciation expense on truck)
Dec. 31
enter an account title to record sale of truck on December 31
enter a debit amount
enter a credit amount
enter an account title to record sale of truck on December 31
enter a debit amount
enter a credit amount
enter an account title to record sale of truck on December 31
enter a debit amount
enter a credit amount
(To record sale of truck)

Answer 1

Answer
Date	Account Title and explanation	Debit	Credit
January 01, 2017	Accumulated Depreciation A/C	$ 63,900
	Machinery A/C		$ 63,900
	(To Record the disposal of machienary)
Jnue , 30 2017	Depreciation Expenses
	Forklift	$ 2,700
	(To Record the depreciation for 6 months)		$ 2,700
June , 30 2017	Accumulated depreciation	$ 18,900
	Cash	$ 10,800
	Forklift		$ 29,700
	(Record the sale of forklift)
Dec , 31 2017	Accumulated Depreciation	$ 17,100
	Loss on Discard of Truck	$ 12,964
	Truck		$ 30064
	(To Record the discard of the truck)
	Calculation of Depreciation as per straight line Depreciation on Forklift
	Cost of Purchase of Equipment	$ 27,000
	Less : Salvage Value	0
	Value for Depreciation	$ 27,000
	Life of the Building is =	5 Year
	Depreciation for the year = ($ 27000 / 5 Years)	$ 5,400
	Depreciation for three years upto 2016 ($ 5400 X 3 Years)	$ 16,200
	Depreciation for the 6 month in June 2017 =($ 5400 X 50%)	$ 2,700
	Total Depreciation	$ 18,900
	CALCULATION OF THE BOOK VALUE OF THE MACHIENE
	Purchase Value =	$ 27,000
	Less: Depreciation	$ 18,900
	Book Value =	$ 8,100
	less : Sales Value	$ 10,800
	Gain on sales =	$ 2,700
	Calculation of Depreciation as per straight line Depreciation on Truck
	Cost of Purchase of Truck	$ 30,064
	Less : Salvage Value	$ 2,704
	Value for Depreciation	$ 27,360
	Life of the Building is =	8 Year
	Depreciation for the year = ($27360 / 8 Years)	$ 3,420
	Depreciation for three years upto 2017 ($ 3420 X 5 Years)	$ 17,100
	Total Depreciation	$ 17,100
	CALCULATION OF THE BOOK VALUE OF THE truck
	Purchase Value =	$ 30,064
	Less: Depreciation	$ 17,100
	Book Value =	$ 12,964
	Loss is of $ 12964