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9 Homework
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3.00 points
ACCOUNTING
Accounting: Template v2: BUSA 201
Introduction to Financial Accounting
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Question 2 (of 10)
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The following transactions and adjusting entries were completed by a paper-packaging company called
Gravure Graphics International during 2015 and 2016. The company uses straight-line depreciation for
trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization
for patents.
January 2, 2015
Paid \$86,000 cash to purchase storage shed components.
January 3, 2015
Paid \$2,000 cash to have the storage shed erected. The storage shed has an
estimated life of 10 years and a residual value of \$5,000.
April
1, 2015
Paid \$40,000 cash to purchase a pickup truck for use in the business. The truck has
an estimated useful life of five years and a residual value of \$3,000.
May
13, 2015
Paid \$500 cash for repairs to the pickup truck.
July
1, 2015
Paid \$29,000 cash to purchase patent rights on a new paper bag manufacturing
process. The patent is estimated to have a remaining useful life of five years.
December 31, 2015
Recorded depreciation and amortization on the pickup truck, storage shed, and
patent
June
30, 2016
Sold the pickup truck for \$34,000 cash. (Record the depreciation on the truck prior
to recording its disposal.)
December 31, 2016
Recorded depreciation on the storage shed. Determined that the patent was
impaired and wrote off its remaining book value (i.e., wrote down the book value to
zero)
Required:
Prepare the journal entries required on each of the above dates. (If no entry is required for a
transaction/event, select \"No Journal Entry Required\" in the first account field. Do not round
intermediate calculations.)
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DELL
