Question

Sandhill Co. had the following assets on January 1, 2022. Useful Life (in years) Salvage Value $0 10 Item Machinery Forklift Truck Cost 567,000 26,000 32,400 Purchase Date Jan 1, 2012 Jan 1, 2019 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 $11,600. 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 cities and enter o for the amounts.) Date Account Titles and Explanation Debit Credit (To record depreciation expense on forklift) (To record sale of forklift) (To record depreciation expense on truck) (To record sale of truck)

Answer 1

Solution Account titles & explanations Date Debit Credit 67,000 01-01-2022 Accumulated Depreciation - Machinary Machinary 67,000 2,600 30-06-2022 Depreciaion Expenses Accumulated Depreciation - Fork lift [To record the depreciation expense on fork lift] 2,600 11,600 18,200 30-06-2022 Cash Accumulated Depreciation - Fork lift (15600+2600)| Fork lift Gain on disposal [To record the sale of fork lift] 26,000 3,800 3,675 31-12-2022 Depreciaion Expenses Accumulated Depreciation - Truck [To record the depreciation expense on Truck] 3,675 22,050 10,350 31-12-2022 Accumulated Depreciation - Truck (18375+3675) Loss on disposal Truck [To record the sale of Truck] 32,400

Working 1 E F G Item Cost ($) Purchase date Useful life Salvage value Asset used (Years) Asset value on 01/01/2022 (B-H) н. Accumulated depreciation upto 01/01/2022 (F*G) 67,000 15,600 18,375 - Machinary Fork lift Truck 67,000 26,000 32,400 01-01-2012 01-01-2019 01-01-2017 Depreciation per year (SLM) ((B-E)/D) 6,700 5,200 3,675 10 5 8 10 3 5 10,400 14,025 3,000 Working 2 Item Asset value on 01/01/2022 Depreciation upto sale (C*E/12) Asset Sold/Discarded for Gain/(Loss) on sale/Discard ((1+G)-Cost) Usage of asset Depreciation Selling date upto sale (In per year (SLM) months) 6700 01-01-2022 0 5200 30-06-2022 3675 31-12-2022 12 Accumulated depreciation upto disposal 67,000 18,200 22,050 Machinary Fork lift Truck 0 2600 10400 14025 11600 0 3,800 3675 (10,350)