E9-9 . Presented below are selected transactions at Ridge Company for 2015. Jan.
ID: 2448122 • Letter: E
Question
E9-9. Presented below are selected transactions at Ridge Company for 2015.
Jan. 1 Retired a piece of machinery that was purchased on January 1, 2005. The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value.
June 30 Sold a computer that was purchased on January 1, 2012. The computer cost $45,000. It had a useful life of 5 years with no salvage value. The computer was sold for $14,000.
Dec. 31 Discarded a delivery truck that was purchased on January 1, 2011. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.
Instructions
Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ridge Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2014.)
Explanation / Answer
Journal Entry
Working
computer
Annual Depreciation Expenses = 45000/5 = 9000
Accumulated Depreciation till Jan 2012 = 9000*3 = 27000
Depreciation Expenses upto june 30 = 9000*6/12 = 4500
Accumulated Depreciation till june 30 2012 = 27000 + 4500 = 31500
delivery truck
Depreciation Expenses upto Dec 31 = (33000-3000)/6 = 5000
Accumulated Depreciation till dec 31, 2012 = 5000*5 = 25000
Date Account Title & Explaination Debit Credit Jan. 1 Accumulated Depreciation 62000 Machine 62000 June 30 Depreciation Expenses 4500 Accumulated Depreciation 4500 June 30 Cash 14000 Accumulated Depreciation 31500 Gain on Sale of Computer 500 Computer 45000 Dec-31 Depreciation Expenses 5000 Accumulated Depreciation 5000 Dec-31 Accumulated Depreciation 25000 Loss on Discard of Delivery Truck 8000 Delivery Truck 33000Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.