The following transactions adjusting entries and closing ent

The following transactions, adjusting entries, and closing entries were completed by Legacy 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. 2014 Jan. 4. Purchased a used delivery truck for $26,960, paying cash. Nov. 2. Paid garage $600 for miscellaneous repairs to the truck. Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $5,250 for the truck. 2015 Jan. 6. Purchased a new truck for $50,150, paying cash. Apr. 1. Sold the used truck for $14,400. (Record depreciation to date in 2015 for the truck.) June 11. Paid garage $465 for miscellaneous repairs to the truck. Dec. 31. Record depreciation for the new truck. It has an estimated residual value of $8,850 and an estimated life of five years. 2016 July 1. Purchased a new truck for $55,520, paying cash. Oct. 2. Sold the truck purchased January 6, 2015, for $17,473. (Record depreciation to date for 2016 for the truck.) Dec. 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $12,565 and an estimated useful life of eight years.

Solution

Answer:

Date

Particulars

Debit $

Credit $

2014

4-Jan

Truck

26,960

   Cash

26,960

(To records the truck purchased)

2-Nov

Auto repair expense

600

   Cash

600

(To record the repairs expanses )

31-Dec

Depreciation

13480

   Accumulated dep-Truck
(100/4 = 25%*2= 50%)

13480

(To record the depreciation )

2015

6-Jan

Truck

50,150

   Cash

50,150

(To records the truck purchased)

1-Apr

Depreciation

1,685

   Accumulated deprecation-Truck
13480*50%*3/12

1,685

(To record the depreciation )

1-Apr

Cash

14,400

Accumulated depreciation-Truck

15,165

   Gain on sale of truck

2,605

   Truck

26,960

(To record the sale of the truck in the year 2015)

11-Jun

Auto repair expense

465

   Cash

465

(To record the repairs expanses )

31-Dec

Depreciation

20,060

   Accumulated dep-Truck
(100/5 = 20%*2= 40%)

20,060

(For depreciation on truck recorded)

2016

1-Jul

Truck

55,520

   Cash

55,520

(To record the truck purchased)

2-Oct

Depreciation

9,027

   Accumulated dep-Truck
100/5 = 20%*2= 40%
30,090*40%*9/12

9,027

(For depreciation on truck recorded)

Cash

17,473

Accumulated dep-Truck

29,087

Loss on sale of truck

3,590

   Truck

50,150

(to record the sale of truck)

31-Dec

Depreciation

6,940

   Accumulated dep-Truck
100/8 = 12.5%*2= 25%
55520*25%*6/12

6,940

(To record the depreciation on truck )

Date	Particulars	Debit $	Credit $
2014
4-Jan	Truck	26,960
	Cash		26,960
	(To records the truck purchased)
2-Nov	Auto repair expense	600
	Cash		600
	(To record the repairs expanses )
31-Dec	Depreciation	13480
	Accumulated dep-Truck (100/4 = 25%*2= 50%)		13480
	(To record the depreciation )
2015
6-Jan	Truck	50,150
	Cash		50,150
	(To records the truck purchased)
1-Apr	Depreciation	1,685
	Accumulated deprecation-Truck 13480*50%*3/12		1,685
	(To record the depreciation )
1-Apr	Cash	14,400
	Accumulated depreciation-Truck	15,165
	Gain on sale of truck		2,605
	Truck		26,960
	(To record the sale of the truck in the year 2015)
11-Jun	Auto repair expense	465
	Cash		465
	(To record the repairs expanses )
31-Dec	Depreciation	20,060
	Accumulated dep-Truck (100/5 = 20%*2= 40%)		20,060
	(For depreciation on truck recorded)
2016
1-Jul	Truck	55,520
	Cash		55,520
	(To record the truck purchased)
2-Oct	Depreciation	9,027
	Accumulated dep-Truck 100/5 = 20%*2= 40% 30,090*40%*9/12		9,027
	(For depreciation on truck recorded)
	Cash	17,473
	Accumulated dep-Truck	29,087
	Loss on sale of truck	3,590
	Truck		50,150
	(to record the sale of truck)
31-Dec	Depreciation	6,940
	Accumulated dep-Truck 100/8 = 12.5%*2= 25% 55520*25%*6/12		6,940
	(To record the depreciation on truck )