Russell Freight way provides freight service The company

s balance sheet includes #606

Russell Freight-way provides freight service. The company’s balance sheet includes Land,
Buildings, and Motor-Carrier Equipment. Russell uses a separate accumulated depreciation
account for each depreciable asset. During 2014, Russell Freight-way completed the following
transactions:Jan 1 Traded in motor-carrier equipment with accumulated depreciation of $83,000
(cost of $136,000) for new equipment with a cash cost of $136,000. Russell received a trade-in
allowance of $63,000 on the old equipment and paid the remainder in cash.Jul 1 Sold a building
that cost $565,000 and had accumulated depreciation of $265,000 through December 31 of the
preceding year. Depreciation is computed on a straight-line basis. The building has a 40-year
useful life and a residual value of $45,000. Russell received $90,000 cash and a $620,000 note
receivable. Oct 31 purchased land and a building for a cash payment of $400,000. An
independent appraisal valued the land at $140,000 and the building at $310,000.Dec 31
Recorded depreciation as follows:New motor-carrier equipment has an expected useful life of 1
million kilometers and an estimated residual value of $24,000. Depreciation method is the units-
of-production method. During the year, Russell drove the truck 180,000 kilometers.Depreciation
on buildings is straight-line. The new building has a 40-year useful life and a residual value
equal to $20,000.RequirementRecord the transactions in Russell Freight-way’s journal. (Round
your depreciation expense to the nearest whole dollar.)View Solution:
Russell Freight way provides freight service The company s balance sheet includes

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