Reference no: EM132567060
Question - 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 $28,000, paying cash.
Nov. 2 Paid garage $675 for miscellaneous repairs to the truck.
Dec. 31 Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $5,000 for the truck.
Year 2 -
Jan. 6 Purchased a new truck for $48,000, paying cash.
Apr. 1 Sold the used truck purchased on Jan. 4 of Year 1 for $15,000. (Record depreciation to date in Year 2 for the truck.)
June 11 Paid garage $450 for miscellaneous repairs to the truck.
Dec. 31 Record depreciation for the new truck. It has an estimated residual value of $9,000 and an estimated life of five years.
Year 3 -
July 1 Purchased a new truck for $54,000, paying cash.
Oct. 2 Sold the truck purchased January 6, Year 2, for $16,750. (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 $12,000 and an estimated useful life of eight years.
Required - Journalize the transactions and the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles.
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