Question

I'm having a hard time calculating the depreciation amounts. Please help.

The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents.

2018
January		2		Paid $95,000 cash to purchase storage shed components.
January		3		Paid $5,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $10,000.
April		1		Paid $38,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $8,000.
May		13		Paid $250 cash for minor repairs to the pickup truck's upholstery.
July		1		Paid $20,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years.
December		31		Recorded depreciation and amortization on the pickup truck, storage shed, and patent.
2019
June		30		Sold the pickup truck for $33,000 cash. (Record the depreciation on the truck prior to recording its disposal.)
December		31		Recorded depreciation on the storage shed. Also determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero).

Required:

Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

Answer 1

Date	Account Name & Explanation	Debit ($)	Credit ($)
2-Jan-2018	Storage Shed	$95,000
	Cash		$95,000
	(To record the purchase of components of storage shed)
3-Jan-2018	Storage Shed	5,000
	Cash		5,000
	(To capitalize the construction cost of the storage shed)
1-Apr-2018	Truck	38,000
	Cash		38,000
	(To record the purchase of trucks)
13-May-2018	Maintenance & Repair Expense	250
	Cash		250
	(To record the payment for truck repair)
1-Jul-2018	Patent	20,000
	Cash		20,000
	(To record the acquisition of patent rights)
31-Dec-2018	Depreciation Expense - Storage Shed	20,000
	1/10 = 10% x 2 = 20% x $(95,000+5000)
	Accumulated Depreciation - Storage Shed		20,000
	(To record the 2018 depreciation of storage shed)
	Depreciation Expense - Truck	4,500
	($38,000 - $8,000) / 5 yrs.) x 9/12 mos.)
	Accumulated Depreciation - Truck		4,500
	(To record the 2018 depreciation on truck)
	Amortization Expense - Patent	2,000
	($20,000 / 5 yrs.) x 6/12 mos.)
	Accumulated Amortization - Patent		2,000
	(To record the amortization on patent)
30-Jun-2019	Depreciation Expense - Truck	3,000
	($38,000 - $8,000) / 5 yrs.) x 6/12 mos.)
	Accumulated Depreciation - Truck		3,000
	(To record the 2019 depreciation of truck prior to its selling)
	Cash	33,000
	Accumulated Depreciation - Truck	7,500
	(2018 $4,500 + 2019 $3,000)
	Truck		38,000
	Gain on Sale of Truck		2,500
	(Cash Proceeds $33,000 - Book Value $30500)
31-Dec-2019	Depreciation Expense - Storage Shed	16,000
	($100,000 - $20,000 = $80,000 x 20%)
	Accumulated Depreciation - Storage Shed	16000	17,440
	(To record the 2019 depreciation on Storage Shed)
	Loss on Write-off of Patent	18,000
	($20,000 - $2,000)
	Accumulated Amortization - Patent	2,000
	Patent		20,000
	(To write-off Patent off the books)

kindly upvote