CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT Problem 10-2 Your answer is par

Question

CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT Problem 10-2 Your answer is partially correct. Try again. Selected accounts included in the property, plant, and equipment section of Larkspur Corporation's balance sheet at December 31, Land Land improvements Buildings Equipment $348,000 162,400 1,276,000 1,113,600 During 2017, the following transactions occurred. 1. A tract of land was acquired for $174,000 as a potential future building site. 2. A plant facility consisting of land and building was acquired from Mendota C common Larkspur's stock had a closing market price of $37 per share on a $371,200 for the building at the exchange date. Current appraised values for the land and building, respectively, are $266,800 and $800,400, 3. Items of machinery and equipment were purchased at a total cost of $464,000. Additional costs were incurred as follows. Freight and unloading Sales taxes Installation $15,080 23,200 30,160 4. Expenditures totaling $110,200 were made for new parking lots, streets, and sidewalks at the corporation's various plant locations. These expenditures had an estimated useful life of 15 years S. A machine costing $92,800 on January 1, 2009, was scrapped on June 30, 2017. Double-declining-balance depreciation has been recorded on the basis of a 10-year life. 6. A machine was sold for $23,200 on July 1, 2017. Original cost of the machine was $51,040 on January 4, 2014, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a salvage value of $2,320 n All Rights Reserved, A Division of

Explanation / Answer

BALANCE SHEET OF LARKSPUR CORPORATION AS ON 31ST DECEMBER 2017

LAND 788800

LAND IMPROVEMENT 272600

BUILDING 2076400

EQUIPMENT 1600310

LAND ACCOUNT

TO BALANCE B/D

TO BANK

TO COMMON STOCK

348000

174000

266800

LAND IMPROVEMENT ACCOUNT   

TO BALANCE B/D

TO BANK

162400

110200

BUILDING ACCOUNT

TO BALANCE B/D

COMMON STOCK

1276000

800400

EQUIPMENT ACCOUNT

TO BALANCE B/D

TO BANK

1113600

532440

BY SCRAP

BY BANK

BY BALANCE B/D

15570

30160

1600310

WORKING NOTES:-

1) EQUIPMENT VALUE SHOULD INCLUDE FREIGHT AND UNLOADING,SALES TAX AND INSTALATION CHARGES.

2) DOUBLE DECLINE BALANCE METHOD MEANS 200% DEPRECIALTION ON BALANCE VALUE. TOTAL DEPRECIATION FROM 1-JAN-2009 TO 30-JUNE -2017 IS 77230.BALANCE AMOUNT IS CREDITED TO EQUIPMENT ACCOUNT THAT IS 15570.

PARTICULARS AMOUNT PARTICULARS AMOUNT

TO BALANCE B/D

TO BANK

TO COMMON STOCK

348000

174000

266800

BY BALANCE C/D 788800 788800 788800

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