121/2017 Problem 93A \"Problem 9-3A Ivanhoe Company had the following assets on

Question

121/2017 Problem 93A "Problem 9-3A Ivanhoe Company had the following assets on January 1, 2017 Useful Life Item Cost Purchase Date (in years) Salvage Value 10 Machinery $56,800 Jan. 1, 2007 Forklift Truck 24,000 Jan. 1, 2014 26,720 Jan. 1, 2012 8 2,400 During 2017, each of the assets was removed from service. The machinery was retired on January I. 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 tittes 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.) Date Aacount Titles and Explanation Debit Credit To record depreciaion expense on forkift) June 30 To record sale of forklirt) To record depreciation expense on truck) Dec. 31 To record sale of truck) https:lledugen.wileyplus.com edugenisharedfassignmenties gprint.uni 1/2

Explanation / Answer

Journal entries:

Jan 1 Accummulated depreciation $56800

To Equipment $56800

Depreciation = ( $56800 / 10 years ) * 10 years

= $56800.

June 30 Depreciation $2400

To accummulated depreciation $2400

[($24000 / 5 yers )*6/12] = $2400

Cash $9600

Accummulated depreciation $16800

To gain on disposal $2400

To equipment $24000

Dec 31 Depreciation $3040

To accummulated depreciation $3040

Loss on disposal $8480

Accummulated depreciation $18240

To equipment $26720.

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