Question

Calculator Print Item Instructions The following transactions and adjusting entries were completed by Legacy Furniture Ca, 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 $26.000, paying cash. Paid garage $825 for miscellaneous repairs to the truck Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $2,000 for the truck Year 2 Jan. 6. Apt. 1. June 11 Dec. 31. Purchased a new truck for $60,000. paying cash. Sold the used truck for $14,000. (Record depreciation to date in Year 2 for the truck.) Paid garage $280 for miscellaneous repairs to the truck Record depreciation for the new truck. It has an estimated residual value of $7.000 and an estimated ife of five years Year 3 July 1. Oct. 2. Purchased a new truck for $65.000 paying cash Sold the truck purchased January 6. Year 2 for $19,520 (Record depreciation to date for Year 3 for the truck.) Recorded depreciation on the remaining truck. It has an estimated residual vakre of $6.000 and an estimated useful life of eight years Dec, 31. Joumalize the transactions and the adjusting enties. Refer to the Chair or Accounts for exacr wordling of account titles Check My Work

Answer 1

Date	Accounts	debit	credit
Year 1
Jan-04	Delivery truck	26000
	cash		26000
Nov-02	Truc repair expense	825
	cash		825
Dec-31	Depreciation expense-Delivery truck	13000
	Accumulated Depreciation -Delivery truck		13000
Year 2
Jan-06	Delivery truck	60000
	cash		60000
Apr-01	Depreciation expense-Delivery truck	1625
	Accumulated Depreciation -Delivery truck		1625
	((26000-13000)*2/4*3/12)
	Accumulated Depreciation -Delivery truck	14625
	Cash	14000
	Delivery truck		26000
	gain on sale of delivery truck		2625
Jun-11	Truc repair expense	280
	cash		280
Dec-31	Depreciation expense-Delivery truck	24000
	Accumulated Depreciation -Delivery truck		24000
Year 3
Jul-01	Delivery truck	65000
	cash		65000
Oct-02	Depreciation expense-Delivery truck	10800
	Accumulated Depreciation -Delivery truck		10800
	((60000-24000)*2/5*9/12)
	Accumulated Depreciation -Delivery truck	34800
	Cash	19520
	Loss on sale of delivery truck	5680
	Delivery truck		60000
Dec-31	Depreciation expense-Delivery truck	8125
	Accumulated Depreciation -Delivery truck		8125
	65000*2/8*6/12