Question

The following transactions and adjusting entries were completed by Legacy Furniture Co during a three year period wted to the use of delivery equipment. The double declining balance method of depreciation is Year 1 Jan 4 Nov 2 Dec 31 Purchased a used delivery truck for $29,200, paying cash. Pald garage $650 for miscellaneous repairs to the truck Recorded depreciation on the truck for the year. The estimated sette of the track is four a sual value of 54,505 for the truck t h Year 2 Jan. 6. Apr 1 June 11 Dec 31 Purchased a new truck for 519,900, paying cash Sold the used track for $15,710. (Record depreciation to date in Year 2 for the truck) Paid garage 5495 for miscellaneous repairs to the truck Record depreciation for the new truck. It has an estimated residual value of 5879 and an estimated We of five years Year 3 July 1 Oct 2 Purchased a new truck for $55,320 paying cash Sold truck purchased January 6. Year 2 for $17,700 (Record depreciation to date for year for the

Answer 1

Year 1
Journal						Accounting Equation
Date	Post Ref	Description	Debit	Credit		Assets	Liabilities	Equity
jan 4	123	Delivery Truck	29200			29200
	110	cash		29200		-29200
Nov-02	524	Repairs & maintenance expenses	650					-650
	110	cash		650		-650
Dec-31	522	Depreciation expense- delivery truck	14480					-14480
	124	Accumulated Depreciation- delivery Truck		14480		-14480
Year 2
Jan-06	123	Delivery Truck	49900			49900
	110	cash		49900		-49900
Apr-01	110	cash	15710			15710
	124	Accumulated Depreciation- delivery Truck	16320			16320
	620	Gain on sale of Delivery Truck		19150				19150
	123	Delivery Truck		12880		-12880
Apr-01	522	Depreciation expense- delivery truck	1840					-1840
	124	Accumulated Depreciation- delivery Truck		1840		-1840
Jun-11	524	Repairs & maintenance expenses	495					-495
	110	cash		495		-495
Dec-31	522	Depreciation expense- delivery truck	19687					-19687
	124	Accumulated Depreciation- delivery Truck		19687		-19687
Year 3
Jul-01	123	Delivery Truck	55320			55320
	110	cash		55320		-55320
Oct-02	522	Depreciation expense- delivery truck	9064					-9064
	124	Accumulated Depreciation- delivery Truck		9064		-9064
Oct-02	110	cash	17708			17708
	124	Accumulated Depreciation- delivery Truck	28750			28750
	620	Gain on sale of Delivery Truck		25308				25308
	123	Delivery Truck		21150		-21150
Dec-31	522	Depreciation expense- delivery truck	6915					-6915
	124	Accumulated Depreciation- delivery Truck		6915		-6915

Depreciation workings	Truck 1	truck 2	truck 3
Cost	29200	49900	55320
Residual value	4505	8790	11715
Useful life	4 years	5 years	8 years
Depreciable value	24695	41110	43605
Depreciation rate - Straight line	25%	20%	12.50%
Double declining rate	50%	40%	25%
year 1 depreciation (362 days)	14480
year 1 carrying value	14720
Year 2 depreciation	1840	19686.58
year 2 carrying value	12880	30213.42
Year 3 depreciation		9064.027	6915
year 3 carrying value		21149.4	48405