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July 23, 2014

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!!

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