E10-9 Presented below are selectedtransactions at Ingles Company for 2010. Jan.
ID: 2434025 • Letter: E
Question
E10-9 Presented below are selectedtransactions at Ingles Company for 2010.
Jan. 1 Retireda piece of machinery that was purchased on January 1,2000.
The machine cost $62,000 on that date. It had a useful life of 10years
with no salvage value.
June 30 Sold acomputer that was purchased on January 1, 2007. Thecomputer
cost $40,000. It had a useful life of 5 years with no salvagevalue. The
computer was sold for $14,000.
Dec. 31 Discarded adelivery truck that was purchased on January 1, 2006.The
truck cost $39,000. It was depreciated based on a 6-year usefullife with
a $3,000 salvage value.
Instructions
Journalized all entries required on the above dates, includingentries to update depreciation, where applicable, on assetsdisposed of Ingles Company uses straight-line depreciation. (Assumedepreciation is up to date as of December 31, 2009.)
Explanation / Answer
1 Retired a piece of machinery that was purchased on January1, 2000. The machine cost $62,000 on that date. It had a useful lifeof 10 years with no salvage value.
Accumulated Depreciation Dr 62000 Asset Cost Cr 62000
June 30 Sold a computer that was purchased onJanuary 1, 2007. The computer cost $40,000. It had a useful life of 5 years with no salvagevalue. The computer was sold for $14,000.
Accumulated Depreciation Dr 24000 Proceeds of sale Dr 14000 P&L A/C Dr 2000 Asset Cost Cr 40000 Dec. 31 Discarded a delivery truck that waspurchased on January 1, 2006. The truck cost $39,000. It was depreciated based on a 6-yearuseful life with a$3,000 salvage value. Accumulated Depreciation Dr 24000 Proceed from Sale (Salvage) Dr 3000 P&L A/C Dr 12000 Asset Cost Cr 39000
1 Retired a piece of machinery that was purchased on January1, 2000. The machine cost $62,000 on that date. It had a useful lifeof 10 years with no salvage value.
Accumulated Depreciation Dr 62000 Asset Cost Cr 62000
June 30 Sold a computer that was purchased onJanuary 1, 2007. The computer cost $40,000. It had a useful life of 5 years with no salvagevalue. The computer was sold for $14,000.
Accumulated Depreciation Dr 24000 Proceeds of sale Dr 14000 P&L A/C Dr 2000 Asset Cost Cr 40000 Dec. 31 Discarded a delivery truck that waspurchased on January 1, 2006. The truck cost $39,000. It was depreciated based on a 6-yearuseful life with a$3,000 salvage value. Accumulated Depreciation Dr 24000 Proceed from Sale (Salvage) Dr 3000 P&L A/C Dr 12000 Asset Cost Cr 39000
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