Cadillac Construction Company uses the retirement method to determine depreciation on its small tools. During 2022, the
Question:
Cadillac Construction Company uses the retirement method to determine depreciation on its small tools. During 2022, the first year of the company’s operations, tools were purchased at a cost of $8,000. In 2024, tools originally costing $2,000 were sold for $250 and replaced with new tools costing $2,500.
Required:
1. Prepare journal entries to record each of the above transactions.
2. Repeat requirement 1, assuming that the company uses the replacement depreciation method instead of the retirement method.
Step by Step Answer:
Requirement 1 To record the acquisition of small tools 2022 Small to...View the full answer
Related Video
A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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