Presented here are selected transactions for Sager Corporation for 2012. Retired

Question

Presented here are selected transactions for Sager Corporation for 2012. Retired a piece of machinery that was purchased on January 1, 2002. The machine cost $71,000 on that date and had a useful life of 10 years with no salvage value. Sold a computer that was purchased on January 1, 2009. The computer cost $30,000 and had a useful life of 5 years with no salvage value. The computer was sold for $10,000. Discarded a delivery truck that was purchased on January 1, 2007. The truck cost $31,000 and was depreciated based on an 8-year useful life with a $3,000 salvage value. Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Sager Corporation uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2011.) (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

Explanation / Answer

Aug 1 Debit Accounts Receivable 21000 Credit Sales 21000 Aug 3 Debit Purchases 38000 Credit Accounts Payable 38000 Aug 5 Debit Freight In 290 Credit Cash 290 Aug 6 Debit Store Supplies 6360 Credit Accounts Payable 6360 Aug 8 Debit Purchases 36000 Debit Freight In 200 [If Lim Company added the freight to the bill] Credit Accounts Payable 36200 Aug 12 Debit Accounts Payable 6000 Credit Purchases Returns and Allowances 6000 Aug 15 Debit Accounts Receivable 12000 Credit Sales 12000 Aug 16 Debit Accounts Payable 2000 Credit Store Supplies 2000 Aug 17 Debit Cash 10000 Credit Sales 10000 Aug 18 Debit Sales Returns and Allowances 2000 Credit Accounts Receivable 2000 Aug 24 Debit Accounts Payable 32000 [38000 - 6000 returned] Credit Cash 32000 Aug 25 Debit Cash 19000 Credit Accounts Receivable 19000 [21000 - 2000 returned]

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