Homework SourseQuestion 5 Sheridan Company had the following assets on Janu
Question 5
Sheridan Company had the following assets on January 1, 2017.
During 2017, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $13,200. The truck was discarded on December 31.
Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on disposed assets. The company uses straight-line depreciation. All depreciation was up to date as of December 31, 2016. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
June 30
Dec. 31
List Of Accounts
Close
Question 5
| Item | Cost | Purchase Date | Useful Life (in years) | Salvage Value | ||||
| Machinery | $78,100 | Jan. 1, 2007 | 10 | $ 0 | ||||
| Forklift | 33,000 | Jan. 1, 2014 | 5 | 0 | ||||
| Truck | 36,744 | Jan. 1, 2012 | 8 | 3,304 |
Solution
Journal entry :
| Date | account & explanation | debit | credit |
| Jan 1 | Accumlated depreciation-Machinery | 78100 | |
| Machinery | 78100 | ||
| (To record machine retired) | |||
| June 30 | Depreciation expense (33000/5)*6/12 | 3300 | |
| Accumlated depreciation-Forklift | 3300 | ||
| (To record depreciation expense) | |||
| June 30 | Cash | 13200 | |
| Accumlated depreciation-Forklift | 23100 | ||
| Gain on sale of forklift | 3300 | ||
| Forklift | 33000 | ||
| (To record Sale of forklift) | |||
| Dec 31 | Depreciation expense (36744-3304/8) | 4180 | |
| Accumlated depreciation-Truck | 4180 | ||
| (To record depreciation expense) | |||
| Dec 31 | Accumlated depreciation-Truck (4180*6) | 25080 | |
| Loss on discard of truck | 11664 | ||
| Truck | 36744 | ||
| (To record discard of truck) | |||
