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Journalize the transactions and the adjusting entries

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Reference no: EM132468455

Problem - Transactions for Fixed Assets, Including Sale

The following transactions and adjusting entries were completed by Legacy 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. 4 Purchased a used delivery truck for $15,360, paying cash.

Nov. 2 Paid garage $230 for miscellaneous repairs to the truck.

Dec. 31 Recorded depreciation on the truck for the year. The estimated useful life of the truck is 4 years, with a residual value of $3,200 for the truck.

Year 2

Jan. 6 Purchased a new truck for $9,000, paying cash.

Apr. 1 Sold the used truck purchased on Jan. 4 of Year 1 for $6,270. (Record depreciation to date in Year 2 for the truck.)

June 11 Paid garage $190 for miscellaneous repairs to the truck.

Dec. 31 Record depreciation for the new truck. It has an estimated residual value of $1,600 and an estimated life of 5 years.

Year 3

July 1 Purchased a new truck for $89,000, paying cash.

Oct. 2 Sold the truck purchased January 6, Year 2, for $3,480. (Record depreciation to date for Year 3 for the truck.)

Dec. 31 Recorded depreciation on the remaining truck purchased on July 1. It has an estimated residual value of $16,000 and an estimated useful life of eight 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.

Reference no: EM132468455

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