Question

Instrucions The following transactions and adjusting entries were completed by Legacy 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. Year 1 Jan. 4 Purchased a used delivery truck for $28,400, paying cash. Paid garage $710 for miscellaneous repairs to the truck Νov 2 Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with Dec. 31 a residual value of $4,835 for the truck Year 2 Purchased a new truck for $46,800, paying cash Jan 6 Sold the used truck for $15,145 (Record depreciation to date in Year 2 for the truck) Apr 1 Paid garage $465 for miscellaneous repairs to the truck June 11 Record depreciation for the new truck It has an estimated residual value of $8.560 and an estimated Dec 31 de of five years Year 3 Purchased a new truck for $52.960 paying cash July 1 Sold the truck purchased January 6, Year 2, for $16,356 (Record depreciation to date for Year 3 for the Oct 2 truck) Recorded depreciation on the remaining truck it has an estimated residual value of $12.375 and an Dec 31 Previous Next

Answer 1

Journal Entry- Legacy Furniture
Date	Account Tittle & Explanation	Debit	Credit
Year 1
4-Jan	Delivery Truck	$28,400.00
	Cash		$28,400.00
	To Record Purchase of Truck
2-Nov	Repair Expense	$710.00
	Cash		$710.00
	To Record Repair Expense
31-Dec	Depreciation Expense—Delivery Truck	$14,200.00
	Accumulated Depreciation - Delivery Truck		$14,200.00
	[$28,400 × (1/4 × 2)]
	To Record Depreciation Expense
Year 2
6-Jan	Delivery Truck	$46,800.00
	Cash		$46,800.00
	To Record Purchase of Truck
1-Apr	Depreciation Expense—Delivery Truck	$1,775.00
	Accumulated Depreciation - Delivery Truck		$1,775.00
	[($28,400 – $14,200) × (1/4 × 2) × 3/12]
	To Record Depreciation Expense
	Accumulated Depreciation - Delivery Truck	$15,975.00
	Cash	$15,145.00
	Delivery Truck		$28,200.00
	Gain on Sale of Delivery Truck		$2,920.00
	To Record Sales of Truck
11-Jun	Repair Expense	$465.00
	Cash		$465.00
	To Record Repair Expense
31-Dec	Depreciation Expense—Delivery Truck	$18,720.00
	Accumulated Depreciation - Delivery Truck		$18,720.00
	To Record Depreciation Expense
	[$46,800 × (1/5 × 2)]
Year 3
1-Jul	Delivery Truck	$52,960.00
	Cash		$52,960.00
	To Record Purchase of Truck
2-Oct	Depreciation Expense—Delivery Truck	$8,424.00
	Accumulated Depreciation - Delivery Truck		$8,424.00
	To Record Depreciation Expense
	[($46,800 – $18,720) × (1/5 × 2) × 9/12]
	Cash	$16,356.00
	Accum. Depreciation—Delivery Truck	$27,144.00
	Loss on Sale of Delivery Truck	$3,300.00
	Delivery Truck		$46,800.00
	To Record Sales of Truck
31-Dec	Depreciation Expense—Delivery Truck	$6,620.00
	Accum. Depreciation—Delivery Truck		$6,620.00
	Delivery truck depreciation.
	[$52,960 × (1/8 × 2) × 1/2]
	To Record Depreciation Expense