Problem 10-5A (Part Level Submission) At December 31, 2017, Grand Company report
ID: 2396082 • Letter: P
Question
Problem 10-5A (Part Level Submission)
At December 31, 2017, Grand Company reported the following as plant assets.
During 2018, the following selected cash transactions occurred.
Retired equipment that cost $514,000 when purchased on December 31, 2008. No salvage value was received.
Land $ 3,670,000 Buildings $27,580,000 Less: Accumulated depreciation—buildings 12,950,000 14,630,000 Equipment 48,100,000 Less: Accumulated depreciation—equipment 4,630,000 43,470,000 Total plant assets $61,770,000 Date Account Titles and Explanation Debit Credit Apr. 1 ?|Land 2040000 Cash 2040000 May 1 Depreciation Expense 38000 Accumulated Depreciation-Equipment 38000 To record depreciation) May 1 |Cash 684000 Accumulated Depreciation-Equipment 494000 Equipment 1140000 Gain on Disposal of Plant Assets 38000 To record sale of equipment) June 1 ?|Cash 1600000 Land 392000 Gain on Disposal of Plant Assets 1208000 July 1 Equipment 2300000 Cash 2300000 Dec. 31 Depreciation Expense 51400 Accumulated Depreciation-Equipment 51400Explanation / Answer
Answers
---Building is 50 years
---Equipment is 10 years
LAND
Cost
1
Original Land
$ 3,670,000.00
Sold
$ (392,000.00)
Remaining
$ 3,278,000.00
2
Land Purchased
$ 2,040,000.00
Total
$ 5,318,000.00
BUILDING
Cost
Accumulated Depreciation
Depreciation expense for 2018
1
Original Buildings
$ 27,580,000.00
$ 12,950,000.00
Sold
$ -
$ -
Remaining
$ 27,580,000.00
$ 12,950,000.00
$ 551,600.00 [$ 27,580,000 cost / 50 years]
EQUIPMENT
Cost
Accumulated Depreciation
Depreciation expense for 2018
1
Original Equipment
$ 48,100,000.00
$ 4,630,000.00
Retired
$ (514,000.00)
$ (514,000.00)
Sold
$ (1,140,000.00)
$ (494,000.00)
Remaining
$ 46,446,000.00
$ 3,622,000.00
$ 4,644,600.00 [$ 46,446,000 remaining cost / 10 years]
2
Equipment Purchased
$ 2,300,000.00
$ 115,000.00 [ ($ 2,300,000 cost / 10 years ) x (6 months/12months)] *because purchased on 1 Jul
Total
$ 48,746,000.00
$ 3,622,000.00
$ 4,759,600.00 [ 4,644,600 + 115,000]
Date
Accounts title
Debit
Credit
Dec-31
Depreciation expenses
$ 551,600.00
Accumulated Depreciation - Building
$ 551,600.00
Dec-31
Depreciation expenses
$ 4,759,600.00
Accumulated Depreciation - Equipment
$ 4,759,600.00
LAND
Cost
1
Original Land
$ 3,670,000.00
Sold
$ (392,000.00)
Remaining
$ 3,278,000.00
2
Land Purchased
$ 2,040,000.00
Total
$ 5,318,000.00
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