P9-5A 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
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
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