Instructions: Journalize each transaction below. Prepare all necessary schedules. 

1.  
2. Changed oil and oil filter on truck, $125 cash
3.  

 

2.  
3. Installed equipment on truck, $2,500 cash.
4.  

 

3.  
4. Replaced motor on equipment, $3,500 cash
5.  

 

4.  
5. Madison Company retired some equipment that cost $135,000 and had accumulated depreciation of $130,000. Journalize the retirement of the equipment.
6.  

 

5.  
6. Madison Co. sold office equipment that originally cost $55,000 for $5,000 cash. The equipment had accumulated depreciation in the amount of $49,000. Record the sale of the equipment.
7.  

 

6.  
7. Assume Madison Co. sold the equipment in #5 for $37,500 and had accumulated depreciation in the amount of $20,000. Record the sale.
8.  

 

7.  
8. Land was purchased costing $98,000; a building was removed at a cost of $5000, with proceeds of $800 from salvaged materials; broker fees were $3,800; attorney’s fees were $1990; journalize the land purchase (assume 20% paid and remainder assigned to a note).
9.  

 

8.  
9. Machinery was purchased for $128,000 cash. It had a salvage value of $8,000 and an estimated useful life of 6 years. Journalize the purchase and the first two month’s depreciation.
10.  

 

9.  
10. The machinery in #8 was sold for $26,000 cash after year 5. Journalize the sale.
11.  

 

10. On August 1, 2010 Madison Co. purchased office equipment for $8000 cash. The estimated useful life is 4 years with a salvage value of $800.

 

•  
• Journalize the purchase of the equipment and the depreciation expense for 2010
•  
• Prepare a schedule showing the depreciation expense, accumulated depreciation, and book value of the equipment.
•  
• Journalize the sale of the equipment in 2014 if it was sold for $800 cash
•  
• Assume it was sold for $3,500 at the end of 2012
•  
• Assume it was sold for $2,100 at the end of 2013
•  

 

11. On January 1, 2010 Madison Co. purchased a vehicle for $55,000 cash. The useful life is expected to be 5 years with an estimated salvage value of $5000. At the end of year 3, Madison decided to increase the useful life to 7 years (in total) and reduce the salvage value to $3000.

 

•  
• Journalize the purchase
•  
• Journalize the first year’s depreciation
•  
• What is the annual depreciation beginning in year 4?
•  

 

Answer rating: 100% (QA)

Here are the journal entries and schedules presented in tables Journal Entries Transaction Descripti... View the full answer