The following transactions adjusting entries and closing, Ask an Expert

Accounting

The following transactions, adjusting entries, and closing entries were completed by Trail Creek Furniture Co. during a three year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used.

2008

Jan. 6. Purchased a used delivery truck for $24,000, paying cash.

July 19. Paid Garage $500 for miscellaneous repairs to the truck.

Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $4,000 for the truck.

2009

Jan 2. Purchased a new truck for $69,000, paying cash.

Aug 1. Sold the used truck for $10,250. (Record the depreciation to date in 2009 for the truck)

Oct 24. Paid garage $415 for miscellaneous repairs to the truck.

Dec 31. Record depreciation for the new truck. It has an estimated residual value of $15,000 and an estimated life of five years.

2010

July 1. Purchased a new truck for $70,000, paying cash.

Oct 1. Sold the truck purchased January 2, 2009, for $25,000. (Record depreciation for the year)

Dec 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $18,000 and an estimated useful life of eight years.

Instructions:

Journalize the transactions and the adjusting entries.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9440684

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