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 $29,400, paying cash.
Mar. 7.	Paid garage $210 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 $6,200 for the truck.
Year 2
Jan. 9.	Purchased a new truck for $53,460, paying cash.
Feb. 28.	Paid garage $310 to tune the engine and make other minor repairs on the used truck.
Apr. 30.	Sold the used truck for $18,150. (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 $9,600 and an estimated life of 9 years.
Year 3
Sept. 1.	Purchased a new truck for $85,000, paying cash.
Sept. 4.	Sold the truck purchased January 9, Year 2, for $37,020. (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 $15,300 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
Mar. 7
Dec. 31
Year 2 Jan. 9
Feb. 28
Apr. 30-Deprec.
Apr. 30-Sale
Dec. 31
Year 3 Sept. 1
Sept. 4-Deprec.
Sept. 4-Sale
Dec. 31

Answer 1

	Ledger	Dr	Cr	Narration
Year 1 Jan. 8	Truck 1	29400		For purchase of asset on cash
	Cash		29400	For purchase of asset on cash
Mar. 7	Repairs and maintenanace	210		For expenses incurred on the truck for running (assuming this does not result in any signification addtion to the capacity of the truck and oil being regular maintenance expense the same is expensed
	Cash		210	For expenses incurred on the truck for running (assuming this does not result in any signification addtion to the capacity of the truck and oil being regular maintenance expense the same is expensed
Dec. 31	Depreciation	6481.27		For depreciation calculated from Jan 8 to Dec 31(29400-6200/7)/360)*352*200%
	Accumulated depreciation		6,481.27	For depreciation calculated from Jan 8 to Dec 31(29400-6200/7)/360)*352*200%
Year 2 Jan. 9	Truck 2	53460		For purchase of asset on cash
	Cash		53460	For purchase of asset on cash
Feb. 28	Repairs and maintenanace	310		For expenses incurred on the truck for running (assuming this does not result in any signification addtion to the capacity of the truck and oil being regular maintenance expense the same is expensed
	Cash		310	For expenses incurred on the truck for running (assuming this does not result in any signification addtion to the capacity of the truck and oil being regular maintenance expense the same is expensed
Apr. 30-Deprec.	Depreciation	2209.52		For depreciation calculated from Jan 1 to April 30(29400-6200/7)/12)*4*200%
	Accumulated depreciation		2,209.52	For depreciation calculated from Jan 1 to April 30(29400-6200/7)/12)*4*200%
Apr. 30-Sale	Cash	18,150.00		For sale of asset 1
	Loss on sale of asset	2,559.21		For loss on sale of asset ( (29400-6481.27-2209.52-18150))
	Accumulated depreciation	8,690.79		For sale of asset 1
	Truck 1		29400	For sale of asset 1
Dec. 31	Depreciation	9503		For depreciation calculated from Jan 9 to Dec 31(53460-9600/9)/360*351*200%
	Accumulated depreciation		9503	For depreciation calculated from Jan 9 to Dec 31(53460-9600/9)/360*351*200%
Year 3 Sept. 1	Truck 1	85000		For purchase of asset on cash
	Cash		85000	For purchase of asset on cash
Sept. 4-Deprec.	Depreciation	6687.29		For depreciation calculated from Jan 1 to Sep 4(247 days
	Accumulated depreciation		6687.29	For depreciation calculated from Jan 1 to Sep 4(247 days
Sept. 4-Sale	Cash	37,020.00		For sale of asset 2
	Loss on sale of asset	249.71		For loss on sale of asset ( (53460-9503-6687.29-37020))
	Accumulated depreciation	16,190.29		For sale of asset 1
	Truck 2		53460	For sale of asset 1
Dec. 31	Depreciation	3,248.89		For depreciation calculated from Sep 1 to Dec 31(4 months)
	Accumulated depreciation		3,248.89	For depreciation calculated from Sep 1 to Dec 31(4 months)