Question

The following transactions, adjusting entries, and closing entries were completed by Lodge Pole Pine Furniture Co. during a three-year period. All are related to the use of delivery equipment.
The straight-line method of depreciation is used.

2005
Jan. 3 Purchased a used delivery truck for $26,500, paying cash.
5 Paid $4,000 for a new transmission for the truck. (Debit Delivery Equipment)
Aug. 16 Paid garage $285 for miscellaneous repairs to the 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 $5,500.

2006
Jan. 1 Purchased a new truck for $65,000, paying cash.
June 30 Sold the used truck for $12,000. (Record depreciation to date in 2006 for the truck.)
Aug. 10 Paid garage $175 for miscellaneous repairs to the truck.
Dec. 31 Recorded depreciation on the truck. It has an estimated residual value of $7,500 and an estimated life of 5 years.

2007
July 1 Purchased a new truck for $84,000, paying cash.
Oct. 1 Sold the truck purchased January 1, 2006, for $26,750. (Record depreciation for the year.)
Dec. 31 Recorded depreciation on the remaining truck. It has an estimated residual value of $8,000 and an estimated useful life of 8 years.

Instructions
Record the transactions and the adjusting entries.



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  • CreatedMay 29, 2012
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