Presented below are selected transactions at Ridge Company for 2020. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2010. 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, 2017. The computer cost $45,000. 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, 2016. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value. Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Ridge Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2019.

Jan. 1

Updating Depreciation:

Depreciation Expense $ 6,200 (debit)

Accumulated Depreciation $ 6,200 (credit)

Recording the Disposal :

Accumulated Depreciation $ 62,000 (debit)

Machine $ 62,000 (credit)

June 30

Updating Depreciation:

Depreciation Expense $ 4,500 (debit)

Accumulated Depreciation $ 4,500 (credit)

Recording the Disposal :

Cash $ 14,000 (debit)

Accumulated Depreciation $ 31,000 (debit)

Computer $ 45,000 (credit)

Dec. 31

Updating Depreciation:

Depreciation Expense $ 5,000 (debit)

Accumulated Depreciation $ 5,000 (credit)

Recording the Disposal :

Accumulated Depreciation $ 25,000 (debit)

Loss on Disposal of Delivery Truck $ 8,000 (debit)

Delivery Truck $ 33, 000 (credit)

Explanation:

It is Important to note that Ridge Company uses straight-line depreciation method.

Thus Depreciation Expense = (Cost of Asset - Salvage Value) / Number of Years - Useful Life

Jan. 1

Updating Depreciation:

Depreciation Expense = $62,000/ 10 years = $6200

Recording the Disposal :

The Machinery is fully depreciated

June 30

Updating Depreciation:

Depreciation Expense = ((45000-0)/5)×6/12 = $4,500

Recording the Disposal :

There is neither a profit nor a loss on Disposal of Computer

Dec. 31

Updating Depreciation:

Depreciation Expense = (33000-3000)/6years = $5,000

Recording the Disposal :

There is a Loss on Disposal of Delivery Truck of  $ 8,000

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

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bioteacher101

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

                                          hope it