Homework Help: Financial Accounting

Posted by Jen on Monday, November 5, 2007 at 11:35am.

Hi,

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
Jan. 1
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 – machinery
Accumulated depreciation – ?????computerMachineryTruckDepreciation expenseAdvertising expenseResearch and development expenseGain on disposalLoss on disposalAccumulated depreciation – truck $
Depreciation expenseGain on disposalAccumulated depreciation – machineryAccumulated depreciation – computerTruckAdvertising expenseLoss on disposalCashMachineryAccumulated depreciation – 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.

Thank you!!

Financial Accounting - Anonymous, Thursday, February 24, 2011 at 12:28am
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.
Rainey Company
Balance Sheet
December 31
2010 2009
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)
$308,000 $212,500

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
$308,000 $212,500

Additional data:
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.

Instructions
Prepare a statement of cash flows (using the indirect method) for 2010 for Rainey Company.

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