Problem:
Presented below are selected transactions at Thomas Company for 2006.
Jan. 1 Retired a piece of machinery that was purchased on January 1, 1996. 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, 2003.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, 2002. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.
Instructions:
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, 2005.)
The following are selected 2006 transactions of Yosuke Corporation.
Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite.
May 1 Purchased for $60,000 a patent with an estimated useful life of 5 years and a legal life of 20 years.
Instructions:
Prepare necessary adjusting entries at December 31 to record amortization required by the events above.