Midterm $2$ Practice Questions

ACCT $2210$

Inventory Purchases, Sales and Returns

The following transactions occurred for Trevor's Toy House:

Trevor's Toy House uses a perpetual inventory system.

Required:

Record the journal entries for the above transactions.

Disposing of depreciable asset at a gain or a loss

Alexander's Automotive Shop purchased a new truck for $$72,000$ on October $1,2021.$ The truck had

a useful life of $8$ years and an expected residual value of $$8,000.$ The company's accountant wishes

to use the straight$-$line depreciation method.

The company has a fiscal year end of December $31.$

On June $30,2023,$ the Company sells the truck for $$60,000.$

Required:

a$)$ Record all relevant journal entries for the truck.

b$)$ Re$-$record the sale journal entry assuming the truck was sold for $$45,000.$