During a three-year period all are related to the use of

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Transactions for Fixed Assets, Including Sale

The following transactions, adjusting entries, and closing entries were completed by King Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used.

2012


Jan. 4.

Purchased a used delivery truck for $28000, paying cash.

nov 2.

Paid garage $675 for changing the oil, replacing the oil filter, and tuning the engine on the delivery truck.

Dec. 31.

Recorded depreciation on the truck for the fiscal year. The estimated useful life of the truck is 4 years,

with a residual value of $5000 for the truck.

2013


Jan. 6.

Purchased a new truck for $48,000, paying cash.

june 11.

Paid garage $450 to tune the engine and make other minor repairs on the used truck.

Apr. 1.

Sold the used truck for $15000 (Record depreciation to date in 2013 for the truck.)

Dec. 31.

Record depreciation for the new truck. It has an estimated trade-in value of $9000 and an estimated life of 7 years.

2014


July 1.

Purchased a new truck for $54,000, paying cash.

Oct. 2.

Sold the truck purchased January 6, 2013, for $16750. (Record depreciation for the year.)

Dec. 31.

Recorded depreciation on the remaining truck. It has an estimated residual value of $12000

and an estimated useful life of 8 years.

Instructions:

Journalize the transaction and the adjusting entries.

Reference no: EM13483742

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