Here are selected 2017 transactions of Novak Corporation. Jan. 1 Retired a piece

Question

Here are selected 2017 transactions of Novak Corporation.

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2007. The machine cost $61,400 and had a useful life of 10 years with no salvage value. June 30 Sold a computer that was purchased on January 1, 2015. The computer cost $35,600 and had a useful life of 4 years with no salvage value. The computer was sold for $4,700 cash. Dec. 31 Sold a delivery truck for $9,500 cash. The truck cost $24,100 when it was purchased on January 1, 2014, and was depreciated based on a 5-year useful life with a $3,300 salvage value.

Explanation / Answer

Journal entries :

Date accounts & explanation debit credit Jan 1 Accumlated depreciation a/c 61400 Machine a/c 61400 (To record machine retired) June 30 Depreciation exp a/c 4450 Accumlated depreciation a/c 4450 (To record depreciation) June 30 Cash 4700 Accumlated depreciation a/c 22250 Loss on sale of computer 8650 Computer a/c 35600 (To record sale of computer) Dec 31 depreciation expenses a/c 4160 Accumlated depreciation a/c 4160 (To record depreciation) Dec 31 Cash a/c 9500 Accumlated depreciation 16640 Gain on sale of truck a/c 2040 Truck a/c 24100 (To record sale of truck)

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