The following transactions and adjusting entries were completed by Legacy 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. 4. | Purchased a used delivery truck for $27,680, paying cash. |
Nov. 2. | Paid garage $725 for miscellaneous repairs to the truck. |
Dec. 31. | Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $4,900 for the truck. |
Year 2 | |
Jan. 6. | Purchased a new truck for $49,850, paying cash. |
Apr. 1. | Sold the used truck for $15,050. (Record depreciation to date in Year 2 for the truck.) |
June 11. | Paid garage $450 for miscellaneous repairs to the truck. |
Dec. 31. | Record depreciation for the new truck. It has an estimated residual value of $9,185 and an estimated life of five years. |
Year 3 | |
July 1. | Purchased a new truck for $53,640, paying cash. |
Oct. 2. | Sold the truck purchased January 6, Year 2, for $17,607. (Record depreciation to date for Year 3 for the truck.) |
Dec. 31. | Recorded depreciation on the remaining truck. It has an estimated residual value of $12,345 and an estimated useful life of eight years. |
Journalize the transactions and the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles.
Depreciation entries
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