The following transactions and adjusting entries were completed by a local delivery company called Super Swift. The company uses straight-line depreciation for delivery vehicles, and double-declining-balance depreciation for buildings, and straight-line amortization for franchise rights.
| January 2, 2010 |
Paid $77,000 cash to purchase a small warehouse building near the airport. The building has an estimated life of 20 years, and a residual value of $20,000.
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| July 1, 2010 |
Paid $30,200 cash to purchase a delivery van. The van has an estimated useful life of five years, and a residual value of $7,200.
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| October 2, 2010 |
Paid $420 cash to paint a small office in the warehouse building.
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| October 13, 2010 |
Paid $170 cash to get the oil changed in the delivery van. |
| December 1, 2010 |
Paid $78,000 cash to UPS to begin operating Super Swift business as a franchise using the name The UPS Store. This franchise right expires in five years.
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| December 31, 2010 |
Recorded depreciation and amortization on the delivery van, warehouse building, and franchise right.
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| June 30, 2011 |
Sold the warehouse building for $65,725 cash. (Record the depreciation on the building prior to recording its disposal.)
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| December 31, 2011 |
Recorded depreciation on the delivery van and amortization on the franchise right. Determined that the franchise right was not impaired in value.
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Give the journal entries required on each of the above dates
| Jan. 2 |
(Click to select)Gain on disposalVehiclesCashEquipmentLandBuildingLoss on disposalFranchise rights |
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(Click to select)Gain on disposalLandCashVehiclesLoss on disposalFranchise rightsEquipmentBuilding |
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| July 1 |
(Click to select)BuildingCashFranchise rightsLoss on disposalEquipmentVehiclesGain on disposalLand |
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(Click to select)Loss on disposalCashGain on disposalFranchise rightsEquipmentLandVehiclesBuilding |
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| Oct 2 |
(Click to select)CashFranchise rightsNotes payableRepairs and maintenance expenseDepreciation expenseBuildingAccounts payableLand |
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(Click to select)Notes payableAccounts payableCashLandBuildingRepairs and maintenance expenseDepreciation expenseVehicles |
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| Oct 13 |
(Click to select)Depreciation expenseAccounts payableRepairs and maintenance expenseFranchise rightsCashAmortization expenseAccumulated depreciationAccounts receivable |
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(Click to select)Accumulated depreciationAccounts receivableRepairs and maintenance expenseCashDepreciation expenseAccounts payableFranchise rightsAmortization expense |
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| Dec 1 |
(Click to select)VehiclesLandNote payableBuildingDepreciation expenseFranchise rightsCashAccumulated depreciation |
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(Click to select)CashNote payableLandVehiclesBuildingDepreciation expenseAccumulated depreciationFranchise rights |
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| Dec. 31 |
(Click to select)Accumulated depreciation-vehiclesAmortization expenseCashDepreciation expenseFranchise rightsAccumulated depreciation-bldg.Gain on disposal Loss on disposal |
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(Click to select)Gain on disposal CashFranchise rightsAccumulated depreciation-vehiclesAmortization expenseAccumulated depreciation-bldg.Loss on disposal Depreciation expense |
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(Click to select)Depreciation expenseLoss on disposalGain on disposal Amortization expenseCashAccumulated depreciation-vehiclesFranchise rightsAccumulated depreciation-bldg. |
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(Click to select)Depreciation expenseAccumulated depreciation-bldg.Accumulated depreciation-vehiclesGain on disposal Franchise rightsCashLoss on disposalAmortization expense |
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(Click to select)Depreciation expenseCashAmortization expenseAccumulated depreciation-bldg.Gain on disposal Franchise rightsLoss on disposalAccumulated depreciation-vehicles |
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| 2011 |
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| June 30 |
(Click to select)Accounts receivableAccumulated depreciation-vehiclesAccumulated depreciation-bldg.Depreciation expenseLoss on disposalAmortization expenseFranchise rightsBuilding |
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(Click to select)Accumulated depreciation-bldg.Loss on disposalFranchise rightsAccumulated depreciation-vehiclesBuildingDepreciation expenseAccounts receivableAmortization expense |
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| June 30 |
(Click to select)Loss on disposalFranchise rightsVehiclesImpairment lossGain on disposal CashAccumulated depreciation-bldg.Accumulated depreciation-vehicles |
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(Click to select)Accumulated depreciation-bldg.Accumulated depreciation-vehiclesGain on disposal Franchise rightsCashVehiclesLoss on disposalImpairment loss |
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(Click to select)Accumulated depreciation-vehiclesImpairment lossGain on disposal VehiclesAccumulated depreciation-bldg.Franchise rightsCashLoss on disposal |
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(Click to select)Accumulated depreciation-bldg.Accounts payableCashLoss on disposalAmortization expenseBuildingDepreciation expenseAccounts receivable |
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| Dec. 31 |
(Click to select)Impairment lossFranchise rightsAmortization expenseCashDepreciation expenseAccumulated depreciation-bldg.BuildingAccumulated depreciation-vehicles |
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(Click to select)Amortization expenseDepreciation expenseAccumulated depreciation-bldg.Franchise rightsAccumulated depreciation-vehiclesBuildingCashImpairment loss |
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(Click to select)Accumulated depreciation-bldg.BuildingAccumulated depreciation-vehiclesCashFranchise rightsAmortization expenseImpairment lossDepreciation expense |
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(Click to select)BuildingImpairment lossAccumulated depreciation-bldg.Amortization expenseCashDepreciation expenseAccumulated depreciation-vehiclesFranchise rights |
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