The following transactions, adjusting entries, and closing entries were completed by King Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used.
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2012
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Jan. 4.
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Purchased a used delivery truck for $29,400, paying cash.
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Feb. 24.
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Paid garage $180 for changing the oil, replacing the oil filter, and tuning the engine on the delivery truck.
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Dec. 31.
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Recorded depreciation on the truck for the fiscal year.
The estimated useful life of the truck is 7 years, with a residual value of $6,200 for the truck.
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2013
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Jan. 3.
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Purchased a new truck for $53,460, paying cash.
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Mar. 7.
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Paid garage $440 to tune the engine and make other minor repairs on the used truck.
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Apr. 30.
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Sold the used truck for $18,150. (Record depreciation to date in 2013 for the truck.)
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Dec. 31.
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Record depreciation for the new truck. It has an estimated trade-in value of $9,600 and an estimated life of 9 years.
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2014
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July 1.
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Purchased a new truck for $89,000, paying cash.
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Oct. 7.
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Sold the truck purchased January 3, 2013, for $36,250. (Record depreciation to date in 2014 for the truck.)
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Dec. 31.
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Recorded depreciation on the remaining truck. It has an estimated residual value of $16,000 and an estimated
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