Question

Application Problem 8-11A Jijang Excavations Ltd. (JEL) operates specialized equipment for installing natural gas pipelines. JEL, which has a December 31 year end, began 2020 with a single piece of equipment that had been purchased on January 1, 2017, for $32,000 and a truck that had been purchased on January 1, 2019, for $40,000. When the equipment was purchased, JEL's management had estimated that the equipment would have a residual value of $5,000 and a useful life of six years. When the truck was purchased, management determined that it would have a useful life of four years and a residual value of $3,000. On March 31, 2020, JEL sold this piece of equipment for $22,875 cash. On April 1, 2020, JEL purchased replacement equipment with double the capacity for $72,200 cash. JEL's management determined that this equipment would have a useful life of six years and a residual value of $11,000. Prepare all necessary journal entries for the year ended December 31, 2020. Assume that JEL uses the straight-line depreciation method for its equipment and the double-diminishing-balance method for its trucks. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.)

(WITH STEPS ) URGENT

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Mar 31	Depreciation	$   1,125
	To Accumalted Depreciation		$   1,125
	(To Record Depreciation Expense for 3 months)
Date	Account Titles and Explanation	Debit	Credit
Mar 31	Cash	$ 22,875
	Accumulated depreciation(1125+13500)	$ 14,625
	Profit on asset disposal		$   5,500
	Equipment		$ 32,000
	(To Record sale of equipment)
Date	Account Titles and Explanation	Debit	Credit
Apr 1	Equipment	$ 72,200
	To Cash		$ 72,200
	(To Record Purchase of equipment)
Date	Account Titles and Explanation	Debit	Credit
Dec 31	Depreciation	$   7,650
	To Accumalted Depreciation Equipment		$   7,650
	(To Record Depreciation on equipment 9 months)
Date	Account Titles and Explanation	Debit	Credit
Dec 31	Depreciation	$   9,250
	To Accumalted Depreciation Truck		$   9,250
	(To Record Depreciation on Truck)

	Purchase Value	Date	Scarp value		Depreciation	Sales
Equipment	$            32,000	1/1/2017	$   5,000	6	$   4,500	22875	$      1,125
Truck	$            40,000	1/1/2019	$   3,000	4	$   9,250		$      3,083
	$            72,200		$ 11,000	6			$             -
3/31/2020