Posted by Jen on .
Sorry for this format, it's kind of hard to read, but I'm supposed to journalize these transactions and I can't get June 30th and Dec. 31st to work out correctly. I would greatly appreciate any help. Thanks!
Jan. 1 Retired a piece of machinery that was purchased on January 1, 1997. The machine cost $71,000 on that date and had a useful life of 10 years with no salvage value.
June 30 Sold a computer that was purchased on January 1, 2004. The computer cost $32,000 and had a useful life of 5 years with no salvage value. The computer was sold for $10,000.
Dec. 31 Discarded a delivery truck that was purchased on January 1, 2002. The truck cost $27,000 and was depreciated based on an 8-year useful life with a $3,000 salvage value.
Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Riley Corporation uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2006.) (For multiple debit/credit entries, list in order of magnitude.)
Date Account / Description Debit Credit
Accumulated depreciation - machinery $ 71000
Machinery $ 71000
June 30 Depreciation expense $ ?????
Accumulated depreciation - computer $ ?????
(To record depreciation on computer.)
Accumulated depreciation - computer $
Cash $ 10000
Computer $ 32000
Gain on disposal $ ?????
(To record the sale of the computer.)
Dec. 31 Depreciation expense $ 3000
Accumulated depreciation - truck $ 3000
(To record depreciation on truck.)
ComputerCashAccumulated depreciation â€“ machinery
Accumulated depreciation â€“ ?????computerMachineryTruckDepreciation expenseAdvertising expenseResearch and development expenseGain on disposalLoss on disposalAccumulated depreciation â€“ truck $
Depreciation expenseGain on disposalAccumulated depreciation â€“ machineryAccumulated depreciation â€“ computerTruckAdvertising expenseLoss on disposalCashMachineryAccumulated depreciation â€“ truckResearch and development expenseComputer $
Truck $ 27000
(To record disposal of truck.)
The long list right above are the options for debit and credit. For Dec. 31st, I was thinking loss on disposal and cash for 24000 and 3000 respectively, but it's incorrect.
Financial Accounting -
Preparation of statement of cash flows (format provided).
The balance sheets for Rainey Company showed the following information. Additional information concerning transactions and events during 2010 are presented below.
Cash $ 30,900 $ 10,200
Accounts receivable (net) 43,300 20,300
Inventory 35,000 42,000
Long-term investments 0 15,000
Property, plant & equipment 236,500 150,000
Accumulated depreciation (37,700) (25,000)
Accounts payable $ 17,000 $ 26,500
Accrued liabilities 21,000 17,000
Long-term notes payable 70,000 50,000
Common stock 130,000 90,000
Retained earnings 70,000 29,000
1 Net income for the year 2010, $76,000.
2 Depreciation on plant assets for the year, $12,700.
3 Sold the long-term investments for $28,000 (assume gain or loss is ordinary).
4 Paid dividends of $35,000.
5 Purchased machinery costing $26,500, paid cash.
6 Purchased machinery and gave a $60,000 long-term note payable.
7 Paid a $40,000 long-term note payable by issuing common stock.
Prepare a statement of cash flows (using the indirect method) for 2010 for Rainey Company.