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an you please show me how to calculate the accumulated depreciation, retained earnings, and net income for 12/31/15, 12/31/16, 12/31/17, and 12/31/18?...
Can you please show me how to calculate the accumulated depreciation, retained earnings, and net income for 12/31/15, 12/31/16, 12/31/17, and 12/31/18? I am having a lot of trouble. Thank you!
A depreciation schedule for semi-trucks of Pronghorn Manufacturing Company was requested by your auditor soon after December 31, 2018, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period 2015 to 2018, inclusive. The following data were ascertained.
Balance of Trucks account, Jan. 1, 2015 Truck No. 1 purchased Jan. 1, 2012, cost$20,520 Truck No. 2 purchased July 1, 2012, cost25,080 Truck No. 3 purchased Jan. 1, 2014, cost34,200 Truck No. 4 purchased July 1, 2014, cost27,360 Balance, Jan. 1, 2015$107,160
The Accumulated Depreciation-Trucks account previously adjusted to January 1, 2015, and entered in the ledger, had a balance on that date of $34,428 (depreciation on the four trucks from the respective dates of purchase, based on a 5-year life, no salvage value). No charges had been made against the account before January 1, 2015.
Transactions between January 1, 2015, and December 31, 2018, which were recorded in the ledger, are as follows.
July 1, 2015Truck No. 3 was traded for a larger one (No. 5), the agreed purchase price of which was $45,600. Pronghorn. paid the automobile dealer $25,080 cash on the transaction. The entry was a debit to Trucks and a credit to Cash, $25,080. The transaction has commercial substance.Jan. 1, 2016Truck No. 1 was sold for $3,990 cash; entry debited Cash and credited Trucks, $3,990.July 1, 2017A new truck (No. 6) was acquired for $47,880 cash and was charged at that amount to the Trucks account. (Assume truck No. 2 was not retired.)July 1, 2017Truck No. 4 was damaged in a wreck to such an extent that it was sold as junk for $798 cash. Pronghorn received $2,850 from the insurance company. The entry made by the bookkeeper was a debit to Cash, $3,648, and credits to Miscellaneous Income, $798, and Trucks, $2,850.
Entries for straight-line depreciation had been made at the close of each year as follows: 2015, $23,940; 2016, $25,650; 2017, $28,557; 2018, $34,656.
