Question

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 $26,960, paying cash.
Nov. 2.	Paid garage $600 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 $5,250 for the truck.
Year 2
Jan. 6.	Purchased a new truck for $50,150, paying cash.
Apr. 1.	Sold the used truck for $14,400. (Record depreciation to date in Year 2 for the truck.)
June 11.	Paid garage $465 for miscellaneous repairs to the truck.
Dec. 31.	Record depreciation for the new truck. It has an estimated residual value of $8,850 and an estimated life of five years.
Year 3
July 1.	Purchased a new truck for $55,520, paying cash.
Oct. 2.	Sold the truck purchased January 6, Year 2, for $17,473. (Record depreciation to date for Year 3 for the truck.)
Dec. 31.	Recorded depreciation on the remaining truck. It has an estimated residual value of $12,565 and an estimated useful life of eight years.

Answer 1

Answer :

Date	General Journal	Debit	Credit
Year 1
4 Jan	Delivery truck	29,960
	Cash		29,960
	Truck repair expense	600
	Cash		600
	Depreciation expense - Delivery Truck	13,480
	Accumulated depreciation - Delivery Truck		13,480
	26960*1/4*2
Year 2
6 Jan	Delivery Truck	50,150
	Cash		50,150
1 Apr	Depreciation expense -Delivery - Truck	1,685
	Accumulated depreciation - Delivery Truck		1,685
	((26960 - 13480)*1/4*2*3/12
1 Apr	Accumulated depreciation Delivery Truck	15,165
	Cash	14,400
	Delivery Truck		26,960
	Gain on sale of delivery truck		2,605
11 Jun	Truck repair expense	465
	Cash		465
31 Dec	Depreciation expense Delivery Truck	20,060
	Accumulated depreciation Delivery Truck		20,060
	50150*2*1/5
Year 3
1 Jul	Delivery Truck	55,520
	Cash		55,520
2 Oct	Depreciation expense - Delivery Truck	9,027
	Accumulate depreciation - Delivery Truck		9,027
	((50150-20060)*(1/5*2)*(9/12))
2 Oct	Cash	17,473
	Accumulated depreciation Delivery Truck 20060 + 9027	29,087
	Loss on sale of delivery Truck	3,590
	Delivery Truck		50,150
31 Dec	Depreciation expense - Delivery Truck	6,940
	Accumulated depreciation - Delivery Truck		6,940
	(55520*(1/8*2)*1/2)