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31 December, 12:03

Sheridan Company had the following assets on January 1, 2022. Item Cost Purchase Date Useful Life (in years) Salvage Value Machinery $64,000 Jan. 1, 2012 10 $ 0 Forklift 23,000 Jan. 1, 2019 5 0 Truck 29,400 Jan. 1, 2017 8 3,000 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 $11,300. The truck was discarded on December 31. 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.

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  1. 31 December, 12:25
    0
    Jan 1

    Dr Accumulated depreciation equipment 64,000

    Cr Equipment 64,000

    June 30

    Dr Depreciation expenses 3,000

    Cr Accumulated depreciation equipment 3,000

    June 30

    Dr Cash 11,300

    Dr Accumulated depreciation equipment

    37,300

    Cr Gain on disposal 25,600

    Cr Equipment 23,000

    Dec 31

    Dr Depreciation expenses 3,300

    Cr Accumulated depreciation truck 3,300

    Dec 31

    Dr Loss on disposal of truck 9,600

    Dr Accumulated depreciation 19,800

    Cr Equipment 23,400

    Explanation:

    Sheridan Company Journal entries

    Jan 1

    Dr Accumulated depreciation equipment 64,000

    Cr Equipment 64,000

    June 30

    Dr Depreciation expenses 3,000

    Cr Accumulated depreciation equipment 3,000

    June 30

    Dr Cash 11,300

    Dr Accumulated depreciation equipment

    ($23,000+$3,000+$11,300) 37,300

    Cr Gain on disposal 25,600

    Cr Equipment 23,000

    Dec 31

    Dr Depreciation expenses 3,300

    ($29,400-$3,000) / 8

    Cr Accumulated depreciation truck 3,300

    Dec 31

    Dr Loss on disposal of truck 9,600

    ($29,400 - $19,800)

    Dr Accumulated depreciation 19,800

    ($3,300*6)

    Cr Equipment 23,400
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