Question

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 $92,000 cash to purchase storage shed components. January 3 Paid $4,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $7,000. April 1 Paid $26,000 cash to purchase a pictup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $5,000. May 13 Paid $400 cash for minor repairs to the pickup truck's upholstery. July 1 Paid $22,000 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 $21,000 cash. (Record the depreciation on the truck prior to recording its disposal.) December 31 Becorded 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 sero). 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.) View transaction list Journal entry worksheet 2 3 4 5 6 7 8 ..... 12 Record the purchase of storage shed components for $93,000. Note: Enter debits before credits. General Journal Debit Credit Date January 02, 2018

Answer 1

Journal Entry- Paper Packaging Company- Storage Shed
Date	Account Titles	Debit	Credit
2018
2-Jan	Building	$93,000.00
	Cash		$93,000.00
3-Jan	Building	$4,000.00
	Cash		$4,000.00
1-Apr	Equipment	$36,000.00
	Cash		$36,000.00
13-May	Repair & Maintaianance	$400.00
	Cash		$400.00
1-Jul	Patent	$22,000.00
	Cash		$22,000.00
31-Dec	Depreciation Expense (19400+4650)	$24,050.00
	Amortization Expense (22000/5)	$4,400.00
	Accumulated Depreciation - Building (97000 X 20%)		$19,400.00
	Accumulated Depreciation - Equipment ( 36000 - 5000)/ 5 X 9/12		$4,650.00
	Accumulated Amortization - Patent		$4,400.00
2019
1-Jul	Depreciation Expense (36000 - 5000) / 5 X 1/2	$3,100.00
	Accumulated Depreciation - Equipment		$3,100.00
	Cash	$31,000.00
	Accumulated Depreciation - Equipment (3100+4650)	$7,750.00
	Equipment		$36,000.00
	Gain On Disposal (bal)		$2,750.00
31-Dec	Depreciation Expense (97000 -19400) X 20%	$15,520.00
	Accumulated Depreciation - Building		$15,520.00
31-Dec	Impairment Loss (22000 -4400)	$17,600.00
	Accumulated Amortization - Patents	$4,400.00
	Patent		$22,000.00