T RESOURCES Ivanhoe Company had the following assets on January 1, 2017. 9-9A (P
ID: 2568874 • Letter: T
Question
T RESOURCES Ivanhoe Company had the following assets on January 1, 2017. 9-9A (Part Useful Life (in years) ItemCostPurchase Date Machinery Forklift Truck Salvage Value $56,800 Jan. 1, 2007 24,000Jan. 1, 2014 26,720 Jan. 1, 2012 10 $ 0 9-5A (Part bmission) 9-3A 2,400 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 $9,600. 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 O for the amounts.) Date Account Titles and Explanation Credit (To record depreciation expense on forklift) June 30 4.24.2 nG. All Rights Reserved. A Division of 1ohn Wiley & Sons. Inc.Explanation / Answer
Machinery (56,800-0)/10 5680 Machine full 10 years expired Forklift Depreciation expense = (24000/5)= 4800 Depreciation expense on june 30 = 4800*6/12= 2400 Accumulated depreciation for three years (2014 to 2016 ) 4800*3= 14400 Truck Depreciation expense (26720-2400)/8= 3040 Accumulated depreciation for five years (2012 to 2016) 15200 Journal entries Accounting titles & Explanations Debit Credit Date Account titles & Explanations Debit Credit 1-Jan Accumulated Depreciation 56,800 Machinery 56,800 30-Jun Depreciation expense 2,400 Accumulated depreciation 2,400 30-Jun Cash 9,600 Accumulated dep (2400+14,400) 16800 Gain on disposal 2,400 Truck 24,000 31-Dec Depreciation expense 3,040 Accumulated depreciation 3,040 31-Dec Accumulated dep(3040+15200) 18240 loss on disposal 8,480 Trucl 26,720
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