Exercise 9-9 Presented below are selected transactions at Ridge Company for 2017

Question

Exercise 9-9

Presented below are selected transactions at Ridge Company for 2017.

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, 2016.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Do not round intermediate calculations.)

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2007. The machine cost $62,100 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, 2014. The computer cost $36,000. It had a useful life of 5 years with no salvage value. The computer was sold for $15,200. Dec. 31 Discarded a delivery truck that was purchased on January 1, 2013. The truck cost $40,440. It was depreciated based on a 6-year useful life with a $3,000 salvage value. Date Account Titles and Explanation Debit Credit To record depreciation to date of disposal) June 30 (To record sale of computer) (To record depreciation to date of disposal) Dec. 31 (To record retirement of truck)

Explanation / Answer

Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1-Jan-17 Accumulated Depreciation - Equipment    62,100.00 ($62,100 / 10 Years) X 10 years    Equipment    62,100.00 (To record the machinery retired) 30-Jun-17 Depreciation Expense      3,600.00 ($36,000 / 5 Years) X 1/2    Accumulated Depreciation - Equipment      3,600.00 (To record the six month depreciation on computer) 30-Jun-17 Cash    15,200.00 Accumulated Depreciation - Equipment    25,200.00 $7,200 X 3 Years + $3,600     Equipment    36,000.00     Gain on sale of Equipment      4,400.00 $15,200 -($36,000 - $25,200) (To record the sale of computer) 31-Dec-17 Depreciation Expense      6,240.00 ($40,440 - $3,000) / 6 Years    Accumulated Depreciation - Equipment      6,240.00 (To record the depreciation on truck for 2017) 31-Dec-17 Loss on Disposal of Plant Assets      9,240.00 $40,440 - $31,200 Accumulated Depreciation - Equipment    31,200.00 $6,240 X 5 Years     Equipment    40,440.00 (To record the truck disposed)

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