Question

The following transactions and adjusting entries were completed by Legacy Furniture Co during a three-year period. Al are related to the use of delivery equipment. The double declining balance method of depreciation is used. Year 1 Jan. 4. Nov. 2 Dec 31 Purchased a used delivery truck for $28,400, paying cash. Paid garage 5710 for miscellaneous repairs to the truck Recorded depreciation on the truck for the year. The estimated useful fe of the truck is four year a residual value of $4,835 for the truck Year 2 Jan. 6. Apr 1 Purchased a new truck for $46,800, paying cash Sold the used truck for $15.145 (Record depreciation to date in Year 2 for the truck.) Paid garage 5465 for miscellaneous repairs to the truck Record depreciation for the new truck It has an estimated residual value of 58 560 and an estimated We of five years Dec 31 Year July Od 2 Purchased a new truck for 552.960. paying cash Sold the truck purchased January 6, Year 2 for $16.356. (Record depreciation to date for Year for truck) Recorded depreciation on the remaining truck it has an estimated residual value of $12375 and an Dec 31 Previous Next

Answer 1

Journal Entry- Legacy Furniture
Date	Account Tittle & Explanation	Debit	Credit
Year 1
4-Jan	Delivery Truck	$28,400.00
	Cash		$28,400.00
	To Record Purchase of Truck
2-Nov	Repair Expense	$710.00
	Cash		$710.00
	To Record Repair Expense
31-Dec	Depreciation Expense—Delivery Truck	$14,200.00
	Accumulated Depreciation - Delivery Truck		$14,200.00
	[$28,400 × (1/4 × 2)]
	To Record Depreciation Expense
Year 2
6-Jan	Delivery Truck	$46,800.00
	Cash		$46,800.00
	To Record Purchase of Truck
1-Apr	Depreciation Expense—Delivery Truck	$1,775.00
	Accumulated Depreciation - Delivery Truck		$1,775.00
	[($28,400 – $14,200) × (1/4 × 2) × 3/12]
	To Record Depreciation Expense
	Accumulated Depreciation - Delivery Truck	$15,975.00
	Cash	$15,145.00
	Delivery Truck		$28,200.00
	Gain on Sale of Delivery Truck		$2,920.00
	To Record Sales of Truck
11-Jun	Repair Expense	$465.00
	Cash		$465.00
	To Record Repair Expense
31-Dec	Depreciation Expense—Delivery Truck	$18,720.00
	Accumulated Depreciation - Delivery Truck		$18,720.00
	To Record Depreciation Expense
	[$46,800 × (1/5 × 2)]
Year 3
1-Jul	Delivery Truck	$52,960.00
	Cash		$52,960.00
	To Record Purchase of Truck
2-Oct	Depreciation Expense—Delivery Truck	$8,424.00
	Accumulated Depreciation - Delivery Truck		$8,424.00
	To Record Depreciation Expense
	[($46,800 – $18,720) × (1/5 × 2) × 9/12]
	Cash	$16,356.00
	Accum. Depreciation—Delivery Truck	$27,144.00
	Loss on Sale of Delivery Truck	$3,300.00
	Delivery Truck		$46,800.00
	To Record Sales of Truck
31-Dec	Depreciation Expense—Delivery Truck	$6,620.00
	Accum. Depreciation—Delivery Truck		$6,620.00
	Delivery truck depreciation.
	[$52,960 × (1/8 × 2) × 1/2]
	To Record Depreciation Expense