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. (I JUST NEED HELP WITH #10,11,12 PLEASE...Been stuck for over a hour!!)

2018
January		2		Paid $90,000 cash to purchase storage shed components.
January		3		Paid $5,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $8,000.
April		1		Paid $33,000 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 $6,000.
May		13		Paid $100 cash for minor repairs to the pickup truck's upholstery.
July		1		Paid $25,000 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 $28,000 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.)

The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics Internation 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 $90,000 cash to purchase storage shed components. January 3 Paid $5,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $8,000. April 1 Paid $33,000 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 $6,000. May 13 Paid $100 cash for minor repairs to the pickup truck's upholstery. July 1 Paid $25,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have 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 $28,000 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.)

Answer 1

Entry No 10 The patent has been used for entrie year 2019. Hence, the amortization for the entire year shall be (25000/5) = $5,000 Credit Debit 5,000 $ Date General Journal 31-Dec-19 Amortization Expense Accumulated Amortization (To record patent amortization expense for the full year) $ 5,000 Entry No 11 The patent needs to be completely written off. Hence, all accumulated balance in amortization shall be reversed against the cost of patents before writing off for impairment loss. Total accumlated amortization balance = 2500+5000 = $ 7,500 Credit Debit 7,500 Date General Journal 31-Dec-19 Accumulated Amortization (2500+5000) $ Patent (To record reversal of the accumulated amortization of patents)|| $ 7,500 Entry No 12 The impairment loss is the balance in patent account, i.e., 25000-7500 = $ 17,500. Date Credit Debit 17,500 31-Dec-19 General Journal Impairment Loss Patent (To record impairment loss on the patent) 17,500