Problem 9-5A The following transactions, adjusting entries and closing entries were completed by Trailways Furniture Co. during a 3yr period
Financial Accounting: An Integrated Statements Approach
By Jonathan E. Duchac, James M. Reeve, Carl S. Warren
Transactions for fixed assets
Problem 9-5A The following transactions, adjusting entries and closing entries were completed by Trailways Furniture Co. during a 3yr period. all are related to the use of delivery equipment. The declining balance method (at twice the straight line method) of depreciation is used CLICK HERE FOR SOLUTION
2005
Jan 2 Purchased a used delivery truck paying $39,000 cash
Jan 5 Paid $1,250 for a new engine (debit delivery equipment)
April 7 Paid garage $125 for oil change and other repairs
Dec 31 Recorded depreciation on the truck for the fiscal yr the estimated useful life
of the truck is 8yrs w/ a residual value of $250
2006
Jan 1 Purchased a new truck for $80,000 paying cash
Mar 13 Paid garage $180 for tune up and other small repairs to the truck
Mar 31 Sold used truck for $24,500 (record depreciation to date for the 2006 truck)
Dec 31 Recorded depreciation on the remaining truck. It has an estimated residual
value of $2,000 and an estimated life of 10yrs
2007
July 1 Bought a new truck for $45,000 paid cash
Oct. 2 Sold the truck bought 1/1/06 for $69,075 (record depreciation for the yr
Dec 31 Recorded depreciation on the remaining truck. it has an estimated residual value of $4,500 and an estimated life of 10yrs
Instructions
Record the transactions and the adjusting entries
