Group Depreciation Entries
Lundquist, Inc., uses the group depreciation method for its furniture account. The depreciation rate used for furniture is 21%. The balance in the furniture account on December 31, 2007, was $125,000, and the balance in Accumulated Depreciation—Furniture was $61,000. The following purchases and dispositions of furniture occurred in the years 2008–2010 (assume that all purchases and disposals occurred at the beginning of each year).
|
Year |
Assets Purchased—Cost (Cash) |
|
Assets Sold |
|
|
|
Cost |
Selling Price (Cash) |
|
2008 |
$35,000 |
$27,000 |
$8,000 |
|
2009 |
27,600 |
15,000 |
6,000 |
|
2010 |
24,500 |
32,000 |
8,000 |
1. Prepare the summary journal entries Lundquist should make each year (2008–2010) for the purchase, disposition, and depreciation of the furniture.
2. Prepare a summary of the furniture and accumulated depreciation accounts for the years 2008 2010.