1. Straight-Line, Declining-Balance, and Sum-of-the-Years’-Digits Methods
A light truck is purchased on January 1 at a cost of $31,870. It is expected to serve for eight years and
have a salvage value of $4,750. Calculate the depreciation expense for the first and third years of the
truck’s life using the following methods. If required, round your answers to the nearest cent.
Depreciation Expense
Year 1
1. Straight-line

$

2. Double-declining-balance

$

3. Sum-of-the-years’-digits

$

Year 3
$

$

$

2. Journal Entries: Disposition of Plant Assets
Prepare the entries for the following transactions using a general journal:

1. Discarding an asset.
On January 4, shelving units, which had a cost of $6,010 and had accumulated depreciation of $5,630,
were discarded.
On June 15, a hand cart, which had a cost of $1,540 and had accumulated depreciation of $1,360, was
sold for $180.
On October 1, a copy machine, which had a cost of $7,480 and had accumulated depreciation of $7,090,
was sold for $425.
If an amount box does not require an entry, leave it blank.

#
A.

Account Title

Debit

Credit

B.

C.

3. Exchange or trade-in of assets.
On December 31, a drill press, which had a cost of $59,320 and had accumulated depreciation of
$47,110, was traded in for a new drill press with a fair market value of $73,100. The old drill press and
$63,000 in cash were given for the new drill press.
On December 31, the old drill press in (a) and $57,750 in cash were given for the new drill press.
If an amount box does not require an entry, leave it blank.

#
A.

Account title

Credit

Debit

B.

4. Sales Journal
Futi Ishanyan owns a retail business and made the following sales during the month of August 20–.
There is a 6% sales tax on all sales.
Aug. 1 Sale No. 213 to Jeter Manufacturing Co., $1,280, plus sales tax.
3
Sale No. 214 to Hassan Co., $2,630, plus sales tax.
7
Sale No. 215 to Habrock, Inc., $1,660, plus sales tax. (Open a new account for this customer.
Address is 125 Fishers Dr., Noblesville, IN 47870-8867.)
11
Sale No. 216 to Seth Mowbray, $1,420, plus sales tax.

18
22
30

Sale No. 217 to Hassan Co., $3,800, plus sales tax.
Sale No. 218 to Jeter Manufacturing Co., $2,770, plus sales tax.
Sale No. 219 to Seth Mowbray, $1,800, plus sales tax.

Record the transactions in the sales journal. If required, round your answers to the nearest cent.
Date

To whom Sold

Accounts
Recievable

Sales Credit

Sales Tax Payable

(122)

(401)

(231)

Aug 1.
Aug 3
Aug 7
Aug 11
Aug 18
Aug 22
Aug 30

Total and verify the column totals and rule the columns. If required, round your answers to the nearest
cent.
Debit total:

$

Credit total:

$

Specific Identification, FIFO, LIFO, and Weighted-Average
Swing Company’s beginning inventory and purchases during the fiscal year ended September 30, 20-2,
were as follows:
Units
Unit Price
Total Cost
October 1, 20-1 Beginning inventory
400
$19.00 $
7,600
October 18
1st purchase
500
19.50
9,750
November 25
2nd purchase
210
20.50
4,305
January 12, 20- 2 3rd purchase
320
21.00
6,720
March 17
4th purchase
920
23.00
21,160
June 2
5th purchase
770
23.50
18,095
August 21
6th purchase
200
24.00
4,800
September 27 7th purchase
690
25.00
17,250
4,010
89,680
Use the following information for the specific identification method.
There are 1,300 units of inventory on hand on September 30, 20-2. Of these 1,300 units:

100 are from October 18, 20-1 1st purchase
200 are from January 12, 20-2 3rd purchase
100 are from March 17 4th purchase
400 are from June 2

5th purchase

200 are from August 21 6th purchase
300 are from September 27

7th purchase

Required:
Calculate the total amount to be assigned to cost of goods sold for the fiscal year ended September 30,
20-2, and ending inventory on September 30, 20-2, under each of the following periodic inventory
methods. For the weighted-average method, round the average unit cost to two decimal places. Round
all final answers to the nearest dollar.
Cost of Goods Sold
$

1. FIFO

Cost of Ending Inventory
$

2. LIFO

$

$

3. Weighted-average

$

$

4. Specific identification

$

$