Jan. 1 Retired a piece of machinery that was purchased on January 1, 2001.The machine cost$62,000 on that date. It had a useful life of 10 years with no salvage value.June 30 Sold a computer that was purchased on January 1, 2008.The computer cost $40,000. Ithad a useful life of 5 years with no salvage value.The computer was sold for $14,000.Dec. 31 Discarded a delivery truck that was purchased on January 1, 2007. The truck cost$39,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.InstructionsJournalize all entries required on the above dates, including entries to update depreciation,where applicable, on assets disposed of. Ingles Company uses straight-line depreciation. (Assumedepreciation is up to date as of December 31, 2010.)
You didn't state the year in which these transactions occurred. I'm assuming 2011. Jan. 1, 2011 Retired a piece of machinery that was purchased on January 1, 2001.The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value. Annual depreciation = $62,000/10 = $$6,200 By December 31, 2010, the machinery would be fully depreciated. Dr Accumulated depreciation $62,000 Cr Machinery $62,000 June 30, 2011 Sold a computer that was purchased on January 1, 2008.The computer cost $40,000. It had a useful life of 5 years with no salvage value.The computer was sold for $14,000. Annual depreciation = $40,000/5 = $8,000 By December 31, 2010, the accumulated depr account would have a balance of $24,000 (3 yrs) You need to depreciate another 6 mths to June 30, 2011 Dr Depreciation expense $4,000 Cr Accumulated depreciation $4,000 after which the accum. depr. would be $28,000, and the carrying amount $12,000. If it was sold for $14,000, there would be a gain of $2,000 Dr Accum depr $28,000 Dr Cash $14,000 Cr Computer $40,000 Cr Gain on disposal of computer $2,000 Dec. 31, 2011 Discarded a delivery truck that was purchased on January 1, 2007. The truck cost $39,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value. Annual depr = ($39,000 - $3,000)/6 = $6,000 By December 31, 2010, the accum. depr. = $24,000 (4 yrs) You need to update depreciation by 1 yr Dr Depreciation $6,000 Cr Accum depr - Truck $6,000 after which the accum depr = $30,000, and the carrying amount = $9,000 Dr Accum depr $30,000 Dr Loss on scrapping of vehicle $9,000 Cr Vehicle $39,000
Interesting arguments, but I am not 100%
