Question

Presented below are selected transactions at Ridge Company for 2020. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2010. The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value. June 30 Sold a computer that was purchased on January 1, 2017. The computer cost $45,000. It had a useful life of 5 years with no salvage value. The computer was sold for $14,000. Dec. 31 Discarded a delivery truck that was purchased on January 1, 2016. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ridge Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2019.

Answer 1

Answer:

Jan. 1

Updating Depreciation:

Depreciation Expense $ 6,200 (debit)

Accumulated Depreciation $ 6,200 (credit)

Recording the Disposal :

Accumulated Depreciation $ 62,000 (debit)

Machine $ 62,000 (credit)

June 30

Updating Depreciation:

Depreciation Expense $ 4,500 (debit)

Accumulated Depreciation $ 4,500 (credit)

Recording the Disposal :

Cash $ 14,000 (debit)

Accumulated Depreciation $ 31,000 (debit)

Computer $ 45,000 (credit)

Dec. 31

Updating Depreciation:

Depreciation Expense $ 5,000 (debit)

Accumulated Depreciation $ 5,000 (credit)

Recording the Disposal :

Accumulated Depreciation $ 25,000 (debit)

Loss on Disposal of Delivery Truck $ 8,000 (debit)

Delivery Truck $ 33, 000 (credit)

Explanation:

It is Important to note that Ridge Company uses straight-line depreciation method.

Thus Depreciation Expense = (Cost of Asset - Salvage Value) / Number of Years - Useful Life

Jan. 1

Updating Depreciation:

Depreciation Expense = $62,000/ 10 years = $6200

Recording the Disposal :

The Machinery is fully depreciated

June 30

Updating Depreciation:

Depreciation Expense = ((45000-0)/5)×6/12 = $4,500

Recording the Disposal :

There is neither a profit nor a loss on Disposal of Computer

Dec. 31

Updating Depreciation:

Depreciation Expense = (33000-3000)/6years = $5,000

Recording the Disposal :

There is a Loss on Disposal of Delivery Truck of  $ 8,000

Answer 2

The appropriate journal entries to record the transactions are:Debit Accumulated Depreciation- Equipment $62,000; Credit Equipment $ 62,000.

Journal entries

Jan 1

Debit Accumulated Depreciation- Equipment $62,000

Credit Equipment $ 62,000

June 30

Debit Depreciation Expense $ 4,500

Credit Accumulated Depreciation-Equipment $ 4,500

(45000×1/5×6/12)

Debit Cash $14,000

Debit Accumulated Depreciation -Equipment $31,000

($45,000-$14,000)

Credit Equipment $45,000

Dec. 31

Debit Depreciation Expense $5,000

Credit Accumulated Depreciation $5,000

[($33,000-$3000)×1/6]

Debit Accumulated Depreciation $ 25,000

[($33,000-$3000)×5/6]

Debit Loss on Disposal of Delivery Truck $ 8,000

($33,000-$25,000)

Credit Delivery Truck $33,000

Inconclusion the appropriate journal entries to record the transactions are:Debit Accumulated Depreciation- Equipment $62,000; Credit Equipment $ 62,000.

Learn more about journal entries here:https://brainly.com/question/14279491