Question

Pharoah Company had the following assets on January 1, 2022. Useful Life in years) Item Salvage Value Machinery Cost $63,000 22,000 Purchase Date Jan 1, 2012 Jan 1, 2019 $0 5 O Forklift Truck 28,400 Jan 1, 2017 3,000 During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $11,200. The truck was discarded on December 31. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2021. (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.) Date Account Titles and Explanation Debit Credit Jan. 1 Accumulated Depreciation Equipment 63000 Equipment 63000 June 30 Depreciation Expense 22000 Accumulated Depreciation Equipment 22000 (To record depreciation expense on forklift) June 30 Cash 11200 Accumulated Depreciation Equipment 15400 Equipment 22000 Gain on Disposal of Plant Assets 22000 (To record sale of forklift) Dec. 31 Depreciation Expense Accumulated Depreciation Equipment (To record depreciation expense on truck) Dec. 31 Accumulated Depreciation Equipment Loss on Disposal of Plant Assets Equipment (To record sale of truck)

Answer 1

Account Titles and Explanation Debit Credit Date Jan-01 Accumulated depreciation-Eequipment $63,000 $ Equipment (To record the retirment of equipment) 63,000 Jun-30 Depreciation expense ($22,000/5*1/2) Accumulated depreciation-Equipment (To record the depreciation expense on forklift) $ 2,200 2,200 $11,200 Jun-30 Cash Accumulated depreciation- Equipment ($22,000/5*3.5 years) Gain on disposal of plant assets Equipment (To record sale of forklift) $15,400 4,600 $ 22,000 Dec-31 Depreciation expense [($28,400-3,000)/8] Accumulated depreciation-Equipment $ 3,175 $ 3,175 |(To record the depreciation expense on truck) Dec-31 Accumulated depreciation-equipment [($28,400-$3,000)/8*6) Loss on disposal of plant assets $ 19,050 $9,350 Equipment (To record the sale of equipment) 28,400