Question

Transactions for Fixed Assets, Including Sale The following transactions and adjusting entries were completed by Robinson Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. Year 1 Jan. 8. Purchased a used delivery truck for $38,400, paying cash. Mar. 7. Paid garage $180 for changing the oil, replacing the oil fiter, and tuning the engine on the delivery truck. Dec. 31. Recorded depreciation on the truck for the fiscal year. The estimated useful life of the truck is 8 years, with a residual value of $8,100 for the truck Year 2 Jan. 9. Purchased a new truck for $44,100, paying cash Feb. 28. Paid garage $400 to tune the engine and make other minor repairs on the used truck Apr. 30. Sold the used truck for $25,300. (Record depreciation to date in Year 2 for the truck.) Dec. 31. Record depreciation for the new truck. It has an estimated trade-in value of $7,900 and an estimated life of 7 years. Year 3 Sept. 1. Purchased i new truck for $86,00, paying cash. Sept. 4. Sold the truck purchased January 9, Year 2, for $26,800. (Record depreciation to date in Year 3 for the truck.) Dec. 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $15,500 and an estimated useful life of 10 years Required: Journalize the transactions and the adjusting entries. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations. Round your final answers to the nearest cent. Delivery Truck 38,400 Year 1 Jan. B Cash 38,400 Required: the transactions and the adjusting entries. If an amount box does not require an entry, leave it blank. Do not round intermediate calculations. Round your final answers to the nearest cent Year 1 lan 8 Delivery Truck 8,400 Cash 38,400 Truck Repair Expense Mar. 7 180 Cash 180 Depreciation Expense Delivery Truck Accumulated Depreciation-Delivery Truck Dec. 3 ) Delivery Truck Year 2 Jan. 9 44,100 Cash 44,100 Feb. 28 Truck Repair Expense 400 Cash Cash 25,40 Accumulated Depreciation-Delivery Truck 5,300 Apr 30-Sale Accumulated Depreciation-Delivery Truck35,30 Cash Loss on Sale of Delivery Truck Truck 15,300 25.00 Accumulated Depreciation-Delivery Truck Apr. 30-Sale Cash Loss on Sale of Delivery Truck Delivery Truck Depreciation Expense-Delivery Truck Dec. 31 Accumulated Depreciation-Delivery Truck Delivery Truck Year 3 Sept. 1 6,000 Cash 86,000 Sept. 4Deprec. Cash 26,800 Accumulated Depreciation-Delivery Truck 26,800 26,800 Sept. 4-Sale Cash Accumulated Depreciation-Delivery Truck Delivery Truck Gain on Sale of Delivery Truck Depreciation Expense-Delivery Truck Dec. 31 Accumulated Depreciation-Delivery Truck

Answer 1

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Year	Date	Account	Debit	Credit
Year 1	Jan 8	Delivery Truck	$ 38,400
		Cash		$ 38,400
	Mar 7	Truck Repair Expense	$       180
		Cash		$       180
	Dec 31	Depreciation Expense-Delivery Truck	$    3,788
		Accumulated Depreciation-Delivery Truck		$    3,788
		($38,400-$8,100)/8 Years
Year 2	Jan 9	Delivery Truck	$ 44,100
		Cash		$ 44,100
	Feb 28	Truck Repair Expense	$       400
		Cash		$       400
	Apr 30	Depreciation Expense-Delivery Truck	$    1,263
		Accumulated Depreciation-Delivery Truck		$    1,263
		($38,400-$8,100)/8 Years*4/12
	Apr 30	Cash	$ 25,300
		Accumulated Depreciation-Delivery Truck ($3,788+$1,262)	$    5,050
		Loss on Sale of Truck	$    8,050
		Delivery Truck		$ 38,400
	Dec 31	Depreciation Expense-Delivery Truck	$    5,171
		Accumulated Depreciation-Delivery Truck		$    5,171
		($44,100-$7,900)/7 Years
Year 3	Sep 1	Delivery Truck	$ 86,000
		Cash		$ 86,000
	Sep 4	Depreciation Expense-Delivery Truck	$    3,448
		Accumulated Depreciation-Delivery Truck		$    3,448
		($44,100-$7,900)/7 Years*8/12
	Sep 4	Cash	$ 26,800
		Accumulated Depreciation-Delivery Truck ($5,171+$3,448)	$    8,619
		Loss on Sale of Truck	$    8,681
		Delivery Truck		$ 44,100
	Dec 31	Depreciation Expense-Delivery Truck	$    2,350
		Accumulated Depreciation-Delivery Truck		$    2,350
		($86,000-$15,500)/10 Years*4/12