Question

The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents. 2018 January 2 Paid $87,eee cash to purchase storage shed components. January 3 Paid $3,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $6,000. April 1 Paid $39,eee cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $4,eee. May 13 Paid $480 cash for minor repairs to the pickup truck's upholstery. July 1 Paid $28,eee cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years. December 31 Recorded depreciation and amortization on the pickup truck, storage shed, and patent. 2019 June 30 sold the pickup truck for $33,eee cash. (Record the depreciation on the truck prior to recording its disposal.) December 31 Recorded depreciation on the storage shed. Also determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero). Required: Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round Intermediate calculations.) View transaction list Journal entry worksheet

Any help appreciated, Thank you!

Answer 1

Journal Entries required on each of the given dates:

Credit Debit $ 87,000 $87,000 $ 3,000 $ 3,000 $ 39,000 $ 39,000 $ 400 $ 400 $ 28,000 $ 28,000 $ 5,250 $ 5,250 $ 18,000 $ 18,000 No. Date General Journal 1 January 02, Storage Shed (Buildings) 2018 Cash (To record the purchase of storage shed components) 2 January 03, Storage Shed (Buildings) 2018 Cash (To record the payment made to have the storage shed erected) 3 April 01, 2018 Pickup Truck (Trucks and Other Vehicles) Cash (To record the purchase of pickup truck) 4 May 13, 2018 Repairs and Maintenance Expense Cash (To record the repairs expense to the pickup truck) 5 July 01, 2018 Patent Cash (To record the purchase of patent on a new paper bag manufacturing process) 6 December 31, Depreciation Expense {[(39,000 - 4,000)/5] x 9/12} 2018 Accumulated Depreciation - Pickup Truck (To record the depreciation on pickup truck for 9 months using straight line method) Depreciation Expense [(90,000/10) x 2] Accumulated Depreciation - Storage Shed (To record the depreciation on storage shed using double declining balance method) Amortization Expense [(28,000/5) 6/12] Accumulated Amortization - Patent (To record the amortization of patent for 6 months using straight line method) June 30, 2019 Depreciation Expense {[(39,000 - 4,000)/5] x 6/12} Accumulated Depreciation - Pickup Truck (To record the depreciation on pickup truck up to the date of sale) 8 June 30, 2019 Cash Accumulated Depreciation - Pickup Truck (5,250 +3,500) Pickup Truck Gain on Disposal of Pickup Truck (To record the sale of the pickup truck) 9 December 31, Depreciation Expense {[(90,000 - 18,000)/10] x 2} 2019 Accumulated Depreciation - Storage Shed (To record the depreciation on storage shed for the year using double declining balance method) 10 December 31, Amortization Expense (28,000/5) 2019 Accumulated Amortization - Patent (To record the patent amortization expense for the full year) 11 December 31, Accumulated Amortization - Patent (2,800 +5,600) 2019 Patent (To record the reversal of the accumulated amortization of patent) 12 December 31, Impairment Loss (28,000 - 8,400) 2019 Patent (To record the impairment loss incurred on the patent) $ 2,800 $ 2,800 7 $ 3,500 $ 3,500 $33,000 $ 8,750 $ 39,000 $ 2,750 $ 14,400 $ 14,400 $ 5,600 $ 5,600 $ 8,400 $ 8,400 $ 19,600 $ 19,600