Here are selected 2014 transactions of Cleland Corporation. Jan. 1 Retired a pie

Question

Here are selected 2014 transactions of Cleland Corporation. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2004. The machine cost $62,110 and 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 $37,000 and had a useful life of 4 years with no salvage value. The computer was sold for $4,860 cash. Dec. 31 Sold a delivery truck for $9,340 cash. The truck cost $23,500 when it was purchased on January 1, 2011, and was depreciated based on a 5-year useful life with a $3,420 salvage value. Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Cleland Corporation uses straight-line depreciation. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Explanation / Answer

since machine is totally depreciated we will pass the following entry

june 30,2014

Derecaition for the computer = 37,000/4 = $9250

Accumulated depreciation for 2 years = 9250 *2 = $18,500

Half year depreciation for this year =     $4625

Journal entry

Entry for deprciation for half year will be

Entry for deprciation for half year will be

Dec 31

Depreciation of the truck ($23,500 - $3420)/5 = $4016

Depreciation for three years = 12,048

Journal entry for current year deprciaion

Entry

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