Question

Question 3

Presented below are selected transactions at Blossom Company for 2017.

Jan. 1		Retired a piece of machinery that was purchased on January 1, 2007. The machine cost £61,370 on that date. It had a useful life of 10 years with no residual value.
June 30		Sold a computer that was purchased on January 1, 2014. The computer cost £35,190. It had a useful life of 5 years with no residual value. The computer was sold for £15,280.
Dec. 31		Discarded a delivery truck that was purchased on January 1, 2013. The truck cost £45,660. It was depreciated based on a 6-year useful life with a £3,840 residual value.

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Blossom Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2016.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1June 30Dec. 31
Jan. 1June 30Dec. 31
	(To record depreciation)
June. 30
	(To record the sale of equipment)
Jan. 1June 30Dec. 31
	(To record depreciation)
Dec. 31
	(To record the discarding of equipment)

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Jan 1	Acccumulated Depreciation-Equipment	£61,370
	Equipment		£61,370
June 30	Depreciation Expense	£3,519		(35,190/5 x 1/2)
	Accumulated Depreciation-Equipment		£3,519
	(To record depreciation)
June 30	Cash	£15,280
	Acccumulated Depreciation-Equipment	£24,633		(35,190 x 3/5 + 3,519)
	Equipment		£35,190
	Gain on Disposal of Plant Assets		£4,723
	(To record the sale of equipment)
Dec 31	Depreciation Expense	£6,970		(45,660 - 3,840)/6
	Accumulated Depreciation-Equipment		£6,970
	(To record depreciation)
June 30	Acccumulated Depreciation-Equipment	£34,850		(45,660 - 3,840) x 5/6
	Loss on Disposal of Plant Assets	£10,810
	Equipment		£45,660
	(To record the discarding of equipment)