Pine Company had the following assets on January 1, 2022. During 2022, each of the assets was
Question:
Pine Company had the following assets on January 1, 2022.
During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $12,000. The truck was discarded on December 31.
Instructions
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, 2021.
Useful life (in years) Purchase Date Jan. 1, 2012 Jan. 1, 2019 Jan. 1, 2017 Salvage Value Item Cost $ -0- -0- Machinery $71,000 10 Forklift 30,000 5 Truck 3,000
Step by Step Answer:
Jan 1 Accumulated Depreciation x Equipment 71000 Equipment 71000 June 30 Depreciation Expense 3000 Accum Depreciation x Equipment 30000 X 15 X 612 300...View the full answer
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119493631
9th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
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