Exercise 9-9 Presented below are selected transactions at Ridge Company for 2015

Question

Exercise 9-9

Presented below are selected transactions at Ridge Company for 2015.

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.) (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2005. The machine cost $64,020 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 $35,690. It had a useful life of 5 years with no salvage value. The computer was sold for $15,640. Dec. 31 Discarded a delivery truck that was purchased on January 1, 2011. The truck cost $36,390. It was depreciated based on a 6-year useful life with a $2,430 salvage value.

Explanation / Answer

SOLUTION

*Accumulated Depreciation - Computer = $35,690 * 3/5 = $21,414, ($21,414 + $3,569) = $24,983

Date Account titles and Explanation Debit ($) Credit ($) Jan.1 Accumulated Depreciation - Equipment 64,020 Equipment 64,020 June 30 Depreciation Expense ($35,690 / 5 * 6/12) 3,569 Accumulated Depreciation - Computer 3,569 (To record depreciation to date of disposal) June 30 Cash 15,640 Accumulated Depreciation - Computer* 24,983 Gain on Disposal of Computer 4,933 Computer 35,690 (To record sale of computer at a gain) Dec.31 Depreciation Expense [($36,390 - $2,430)/6] 5,660 Accumulated Depreciation - Truck 5,660 (To record depreciation to date of disposal) Dec.31 Loss on Disposal of Truck 8,090 Accumulated Depreciation-Truck($36,390 - $2,430)*5/6 28,300 Truck 36,390 (To record retirement of equipment at a loss)

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.