Question

The following transactions and adjusting entries were completed by a local delivery company called Fast Delivery. The company uses straight-line depreciation for delivery vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for franchise rights.

January	2	, 2015	Paid $179,000 cash to purchase a small warehouse building near the airport. The building has an estimated life of 20 years and a residual value of $3,700.
July	1	, 2015	Paid $47,000 cash to purchase a delivery van. The van has an estimated useful life of five years and a residual value of $9,400.
October	2	, 2015	Paid $700 cash to paint a small office in the warehouse building.
October	13	, 2015	Paid $100 cash to get the oil changed in the delivery van.
December	1	, 2015	Paid $84,000 cash to UPS to begin operating Fast Delivery business as a franchise using the name The UPS Store. This franchise right expires in five years.
December	31	, 2015	Recorded depreciation and amortization on the delivery van, warehouse building, and franchise right.
June	30	, 2016	Sold the warehouse building for $143,000 cash. (Record the depreciation on the building prior to recording its disposal.)
December	31	, 2016	Recorded depreciation on the delivery van and amortization on the franchise right. Determined that the franchise right was not impaired in value.

Required:

Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

Answer 1

2015
Jan-02	Warehouse building	179000
	Cash		179000
Jul-01	Delivery van	47000
	Cash		47000
Oct-02	Building maintenance expenses	700
	Cash		700
Oct-13	Van maintenance expenses	100
	Cash		100
Dec-01	Franchise rights-UPS	84000
			84000
Dec-31	Depreciation expense-Warehouse [(179000-3700)/20]	8765
	Accumulated depreciation-Warehouse		8765
	Depreciation expense-Delivery van ((47000-9400)/5))/2	3760
	Accumulated depreciation-Delivery van		3760
	Amortization expense-Franchise (84000/5)/12 =	1400
	Accumulated amortization expense-Franchise		1400
2016
Jun-30	Depreciation expense-Warehouse =8765/2=	4383
	Accumulated depreciation-Warehouse		4383
	Cash	143000
	Accumulated depreciation-Warehouse	13148
	Loss on disposal of warehouse building	22853
	Warehouse building		179000
Dec-31	Depreciation expense-Delivery van (47000-9400)/5)	7520
	Accumulated depreciation-Delivery van		7520
	Amortization expense-Franchise (84000/5)	16800
	Accumulated amortization expense-Franchise		16800