Question

Presented below are selected transactions at Culver Company for 2020.

Jan.	1		Retired a piece of machinery that was purchased on January 1, 2010. The machine cost $62,400 on that date. It had a useful life of 10 years with no salvage value.
June	30		Sold a computer that was purchased on January 1, 2017. The computer cost $37,800. It had a useful life of 5 years with no salvage value. The computer was sold for $15,400.
Dec.	31		Discarded a delivery truck that was purchased on January 1, 2016. The truck cost $37,620. It was depreciated based on a 6-year useful life with a $3,000 salvage value.

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Culver Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2019.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Culver Company Journal Enteries Date Particulars 1.1.2020 Accumulated Depreciation - Machinea/c Dr. To Machinery (To record retirement of Machinery) 62400 x 10/10 Debit in $ Credit in $ 62400 62400 3780 30.6.2020 Depreciation Expense a/c Dr. To Accumulated Depreciation - Computer (To record depreciation) 37800 / 5 = 7560 x 6/12 = 3780 3780 Cash a/c Dr. 15400 Accumulated Depreciation - Computer a/c Dr. 26460 To Computer 37800 To Gain on sale of Computer 4060 (To record sale of Computer) Accumulated Depreciation = 37800 / 5 = 7560 x 3 = 22680 + 3780 = 26460 5770 31.12.2020 Depreciation Expense a/c Dr. To Accumulated Depreciation - Truck (To record depreciation) 37620 - 3000 = 34620 / 6 = 5770 5770 Accumulated Depreciation - Computer a/c Dr. 28850 Loss on disposal a/c Dr. 8770 To Truck (To record retirement of Computer) 5770 x 4 = 23080 + 5770 = 28850 37620