Question

Your answer is partially correct. Try again. Sandhill Co. had the following assets on January 1, 2017. Useful Life (in years) Salvage Value $ 0 Item Machinery Forklift Truck Cost $82,360 34,800 38,744 Purchase Date Jan. 1, 2007 Jan. 1, 2014 Jan. 1, 2012 5 3,480 During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $13,920. 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, 2016. (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 titles and enter o for the amounts.)

Answer 1

Credit Date Jan. 1 Debit $82.360 Account Titles and Explanation Accumulated depreciation Equipment Equipment (To record depreciation on machinery) $82.360 June 30 $3.480 Depreciation expense [($34.800/5)*6/12] Accumulated depreciation Equipment (To record depreciationexpense on forklift) $3,480 June 30 $13.920 $24.360 Cash Accumulated depreciation Equipment Gain on disposal of plant aseets Equipment (To record sale of forklift) $3,480 $34,800 Workings: Calculation of depreciation: = Depreciation from 2014 to 2016 + Depreciation from 2017 = ($34.800 * 3/5) + ($34.800/5)*6/12 = $20.880 + $3.480 = $24.360 Calculation of gain on disposal of plant assets: = $13,920 - ($34,800 - $24,360) = $13.920 - $10.440 = $3.480 Dec.31 $4.408 Depreciation expense [($38.744 - $3,480)/8] Accumulated depreciation Equipment (To record depreciationexpense on truck) $4.408 Dec.31 $12.296 $26.448 Loss on disposal of plant aseets Accumulated depreciation Equipment Equipment (To record discarded of truck) $38.744 Calculation of depreciation: = Depreciation from 2012 to 2017 = [($38.744 - $3.480) * 6/8] = $26.448