Here are selected 2014 transactions of Cleland Corporation. Journalize all entri

Question

Here are selected 2014 transactions of Cleland Corporation.

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.)

Date

Account Titles and Explanation

Debit

Credit

(To record depreciation expense for the first 6 months of 2014)

(To record depreciation expense for the year 2014)

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2004. The machine cost $62,990 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 $35,600 and had a useful life of 4 years with no salvage value. The computer was sold for $4,010 cash. Dec. 31 Sold a delivery truck for $9,440 cash. The truck cost $24,000 when it was purchased on January 1, 2011, and was depreciated based on a 5-year useful life with a $4,080 salvage value.

Explanation / Answer

DR CR Accumulated Depreciation - Equipment 62990 Equipment 62990 To record disposal of machinery Depreciation Expense 4450 Accumulated Depreciation 4450 35600/4*6/12 To record deprecation expense for first 6 months of 2014 Cash 4010 Accumulated Depreciation 8900*2 +4450 22250 Loss On sale 13350 Computer 35600 To record sale of computer Depreciation Expense =+(24000-4080)/5 3984 Accumulated Depreciation 3984 (To record depreciation expense for the year 2014) Cash 9440 Accumulated depreciation 3984*4 15936 Gain on sale 1376 Truck 24000 To record sale of delivery truck

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