Oriole Company had the following assets on January 1, 2017. During 2017, each of

Question

Oriole Company had the following assets on January 1, 2017.

During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $12,720. The truck was discarded on December 31.

Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2016. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Item Cost Purchase Date Useful Life
(in years) Salvage Value Machinery $75,260 Jan. 1, 2007 10 $ 0 Forklift 31,800 Jan. 1, 2014 5 0 Truck 35,408 Jan. 1, 2012 8 3,184 Jan. 1 |Accumulated Depreciation-Equipment 75,260 Equipment June 30 Depreciation Expense Accumulated Depreciation-Equipment (To record depreciation expense on forklift) June 30 Cash 12,720 Accumulated Depreciation-Equipment Equipment 31,800 Gain on Disposal of Plant Assets (To record sale of forklift) Depreciation Expense Dec. 31 Accumulated Depreciation-Equipment (To record depreciation expense on tr Dec. 31 Accumulated Depreciation-Equipment uck) Loss on Disposal of Plant Assets

Explanation / Answer

Calculations:

Note: The credit to Equipment in Jan. 1 entry is correct. Don’t know why it is showing incorrect.

Date Account Titles and Explanations Debit Credit Jan. 1 Accumulated depreciation-equipment 75260 Equipment 75260 (To record retirement of machinery) June. 30 Depreciation expense 3180 Accumulated depreciation-equipment 3180 (To record depreciation expense on forklift) June. 30 Cash 12720 Accumulated depreciation-equipment 22260 Equipment 31800 Gain on disposal of plant assets 3180 (To record sale of forklift) Dec. 31 Depreciation expense 4028 Accumulated depreciation-equipment 4028 (To record depreciaiton expense on truck) Dec. 31 Salvaged materials 3184 Accumulated depreciation-equipment 24168 Loss on disposal of plant assets 8056 Equipment 35408 (To record discarding of truck)

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