Presented below are selected transactions at Ridge Company for 2017.

Presented below are selected transactions at Ridge Company for 2017.

Jan. 1 Retired a piece of machinery that was purchased on January 1, 2007. The machine cost $61,300 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, 2014. The computer cost $44,500. It had a useful life of 5 years with no salvage value. The computer was sold for $15,300.
Dec. 31 Discarded a delivery truck that was purchased on January 1, 2013. The truck cost $38,220. 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, 2016.)

Jan. 1
Accumulated Depreciation-Equipment Debit 61,300
Equipment Credit 61,300
June 30
Depreciation Expense Debit 4450
Accumulated Depreciation-Equipment Credit 4450
(To record depreciation to date of disposal)

Cash Debit 15,300
Accumulated Depreciation-Equipment Debit 31150
Gain on Disposal of Plant Assets credit 1950
Equipment Credit 44,500
(To record sale of computer at a gain)
Dec. 31
Depreciation Expense Debit 5870
Accumulated Depreciation-Equipment Credit 5870

(To record depreciation to date of disposal)

Loss on Disposal of Plant Assets Debit 8870
Accumulated Depreciation-Equipment Debit 29350
Equipment Credit 38,220
(To record retirement of truck at a loss)

June 30
Accumulated Depreciation-Equipment ($44,500 × 1/5 × 6/12) = $4,450

June 30
Accumulated Depreciation-Equipment ($44,500 × 3/5 = $26,700; $26,700 + $4,450) = $31,150
Gain on Disposal of Plant Assets [$15,300 – ($44,500 – $31,150)] = $1,950

Dec. 31
Accumulated Depreciation-Equipment [($38,220 – $3,000) × 1/6] = $5,870

Dec. 31
Accumulated Depreciation-Equipment [($38,220 – $3,000) × 5/6] = $29,350

Yello Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2017, at a cost of $189,320. Over its 7-year useful life, the bus is expected to be driven 125,600 miles. Salvage value is expected to be $7,200.

Compute the depreciable cost per unit.

Compute the depreciable cost per unit.

Depreciation cost per unit is $1.45 per mile [($189,320 – $7,200) ÷ 125,600].