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Journalize: Entries for a Specific Company

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Presented below are selected transactions at Thomas Company for 2005.

Jan. 1: Retired a piece of machinery that was purchased on January 1, 1995. 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, 2002.The computer cost $35,000. It had a useful life of 5 years with no salvage value. The computer was sold for $12,000.

Dec. 31: Discarded a delivery truck that was purchased on January 1, 2001. 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. Thomas Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2004.)

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Solution Summary

This solution is comprised of a response providing the entries together with explanations about the disposition of assets. An Excel file is attached which contains the solution in proper format.

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Thompson Company
2005 Debit Credit

1-Jan Retired Assets $6,200
Accumulated Depreciation $55,800
Equipment $62,000

To record the retirement of an asset used in operations. Asset was purchased 1-1-95 with a 10 ...

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