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Falak Naz
Falak Naz, Accountant
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1) Journalize all entries required on the above dates,

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Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ingles Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2007.)

Jan. 1 Retired a piece of machinery that was purchased on January 1, 1998. 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, 2005. The computer cost $40,000. It had a useful life of 5 years with no salvage value. The computer was sold for $14,000.

Dec. 31 Discarded a delivery truck that was purchased on January 1, 2004. The truck cost $39,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.

2) Brainiac Company purchased a delivery truck for $30,000 on January 1, 2008. The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 15,000 in 2008 and 12,000 in 2009.

Compute depreciation expense for 2008 and 2009 using the double-declining balance method.

Assume that Brainiac uses the straight-line method. (1) Prepare the journal entry to record 2008 depreciation.

(2) Show how the truck would be reported in the December 31, 2008, balance sheet.
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