Accounting Question Help!!!?

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2002. The machine cost $70,300 on that date and had a useful life of 10 years with no salvage value.
June 30 Sold a computer that was purchased on January 1, 2009. The computer cost $29,800 and had a useful life of 5 years with no salvage value. The computer was sold for $11,920.
Dec. 31 Discarded a delivery truck that was purchased on January 1, 2007. The truck cost $35,000 and was depreciated based on an 8-year useful life with a $4,200 salvage value.
Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Snow Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2011.)
Using these list of accounts:
Accounts Payable
Accounts Receivable
Accumulated Depreciation-Buildings
Accumulated Depreciation-Equipment
Advertising Expense
Allowance for Doubtful Accounts
Amortization Expense
Bad Debts Expense
Buildings
Cash
Common Stock
Copyrights
Cost of Goods Sold
Depreciation Expense
Dividends
Equipment
Franchise
Gain on Disposal of Plant Assets
Goodwill
Income Tax Expense
Income Taxes Payable
Interest Expense
Interest Payable
Interest Receivable
Interest Revenue
Inventory
Land
Land Improvements
Loss on Disposal of Plant Assets
Maintenance and Repairs Expense
No Entry
Notes Payable
Notes Receivable
Other Operating Expenses
Patents
Prepaid Insurance
Property Taxes Expense
Research and Development Expense
Retained Earnings
Salaries and Wages Expense
Salaries and Wages Payable
Sales Revenue

Both comments and pings are currently closed.

One Response to “Accounting Question Help!!!?”

  1. Michael says:

    **** Assuming the year is now 2012 ****
    1. At January 1 2012 the machine purchase 1 January 2002 has been fully written off over 10 years. So the balances on the equipment and accumulated depreciation account will be 70300 and need removing.
    Accumulated Depreciation-Equipment 70300 DR
    Equipment 70300 CR
    2. The annual depreciation on the computer is 29800 / 5 = 5960 per year
    The computer has been used for 3.5 years so accumulated depreciation is 5960 x 3.5 = 20860
    The depreciation for 2012 (6 months) is 5960 x 6/12 = 2980
    The computer was sold for 11920 so the profit on disposal is 2980
    Depreciation Expense 2980 DR
    Accumulated Depreciation-Equipment 2980 CR
    Depreciation for 2012
    Equipment 29800 CR
    Accumulated Depreciation-Equipment 20860 DR
    Gain on Disposal of Plant Assets 2980 CR
    Cash 11920 DR
    To record gain on disposal (assuming sold for cash)
    3.
    The truck has straight line depreciation of (35000 – 4200) / 8 = 3850 per year.
    After 6 years the accumulated depreciation is 3850 x 6 = 23100 and the book value is 35000 – 23100 = 11900
    The amount written off (loss) is 11900
    The depreciation for 2012 is 3850
    Depreciation Expense 3850 DR
    Accumulated Depreciation-Equipment 3850 CR
    Depreciation for 2012
    Equipment 35000 CR
    Accumulated Depreciation-Equipment 23100 DR
    Loss on Disposal of Plant Assets 11900 DR
    To record loss on write off

Powered by WordPress | Designed by: free css template | Thanks to hostgator coupon and web hosting reviews