Problem 9-2A (Part Level Submission) $ 5,196,000 $30,050,000 20,654,100 9,395,90

Question

Problem 9-2A (Part Level Submission)

$ 5,196,000

$30,050,000

20,654,100

9,395,900

69,280,000

8,660,000

60,620,000

$75,211,900

(a)

Journalize the transactions. Navaro uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 40-year useful life and no salvage value; the equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually.

Problem 9-2A (Part Level Submission)

At December 31, 2014, Navaro Corporation reported the following plant assets.
Land

$ 5,196,000

Buildings

$30,050,000

Less: Accumulated depreciation—buildings

20,654,100

9,395,900

Equipment

69,280,000

Less: Accumulated depreciation—equipment

8,660,000

60,620,000

Total plant assets

$75,211,900

During 2015, the following selected cash transactions occurred.
Apr. 1 Purchased land for $3,810,400. May 1 Sold equipment that cost $1,039,200 when purchased on January 1, 2008. The equipment was sold for $294,440. June 1 Sold land for $2,771,200. The land cost $1,732,000. July 1 Purchased equipment for $1,905,200. Dec. 31 Retired equipment that cost $1,212,400 when purchased on December 31, 2005. No salvage value was received.

Explanation / Answer

1 - land debit                   3810400

     credit cash                                      3810400

(land purchased)

2- cash debit                                      294440

    accumulated depreciation debit      762640

    credit equipment                                             1039200

    credit profit and loss account                            17880

rough work: cost of machine - accumulated depreciation = remaining balance = 1039200- 762640 = 276560

profit on sale of equipment = 294440 - 276560 = 17780

Depreciation for 7 years and 4 months = 103920*7 + 34660 = 762080

3- cash     debit                           2771200

     credit land                                           1732000

     credit profit on sale of land                    1039200

4- equipment   debit        1905200

    credit cash                             1905200

(equipment purchased)

5- accumulated depreciation debit    121240

   credit equipment                                  121240

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