Question

Capital and revenue expenditures

Instructions

Quality Move Company made the following expenditures on one of its delivery trucks:

Mar. 20	Replaced the transmission at a cost of $1,990.
June 11	Paid $1,455 for installation of a hydraulic lift.
Nov. 30	Paid $57 to change the oil and air filter.

Prepare journal entries for each expenditure. Refer to the Chart of Accounts for exact wording of account title.

CHART OF ACCOUNTS
Quality Move Company
General Ledger
ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 123 Delivery Truck 124 Accumulated Depreciation-Delivery Truck 125 Equipment 126 Accumulated Depreciation-Equipment 130 Mineral Rights 131 Accumulated Depletion 132 Goodwill 133 Patents LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner's Capital 311 Owner's Drawing	REVENUE 410 Sales 610 Interest Revenue 620 Gain on Sale of Delivery Truck 621 Gain on Sale of Equipment EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Delivery Truck 523 Delivery Expense 524 Repairs and Maintenance Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense-Equipment 533 Depletion Expense 534 Amortization Expense-Patents 535 Insurance Expense 536 Supplies Expense 539 Miscellaneous Expense 710 Interest Expense 720 Loss on Sale of Delivery Truck 721 Loss on Sale of Equipment

Journal

Prepare journal entries for each expenditure. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL                                                                                 ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
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5
6

Answer 1

Journal entries :- Accounts Title & Explanation Date Post Ref Debit $ Credit $ Liabilities Equitty Asset 20-Mar Accumulated Depreciation-Delivery Truck 1.990 124 1,990 To Cash 110 1,990 1.990 (Entry for Replaced the transmission) 11-Jun Delivery Truck 123 1,455 1,455 To Cash 110 1,455 (1,455) (Entry for installation of a hydraulic lift.) Repairs & Maintenance expense 30-Nov 524 57 (57) To Cash 110 57 (57) (Entry for change the oil and air filter.)