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    Tomas Co: Depreciation & asset disposal journal entries

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    Show the journal entries for the following, including any entries to depreciation to update through date of disposal. Assume straight-line method and that depreciation was last recorded on Dec 31, 2013.

    Jan 1, 2014: Tomas Company disposed of a piece of machinery that was purchased on January 1, 2004 . The machine cost $60,450 with a useful life of 10 years and no salvage value.

    June 30, 2014: Sold a computer for $13,610 bought on January 1, 2011. The computer cost $35,940 with a useful life of 5 years and no salvage value.

    Dec. 31 2014: Disposed of a delivery truck that was purchased on January 1, 2010 that originally cost $34,960 and was depreciated with a 6-year useful life and salvage value of $2,080.

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    Solution Preview

    See schedules and journal entries attached in Excel.

    Journal entries:
    DEBIT CREDIT
    Jan 1 Accumulated depreciation $60,450.00
    Machinery $60,450.00
    (record retirement of fully depreciated machine)
    Cost $60,450
    Useful life 10.00
    Salvage $-
    annual depreciation
    2004 $6,045
    2005 $6,045
    2006 $6,045
    2007 $6,045 ...

    Solution Summary

    See schedules and journal entries attached in Excel.

    $2.19