Journal Entries for Plant Assets During the first few days of the year, Coast Co

Question

Journal Entries for Plant Assets During the first few days of the year, Coast Company entered into the following transactions: Purchased a parcel of land with a building on it for $900,000 cash. The building, which will be used in operations, has an estimated useful life of 25 years and a salvage value of $60,000. The assessed valuations for property tax purposes show the land at $80,000 and the building at $720,000 2Paid $31,200 for the construction of an asphalt parking lot for customers. The parking lot is expected to last 12 years and has no salvage value. 3 Paid $25,000 for the construction of a new entrance to the building Purchased store equipment, paying the invoice price (including seven percent sales tax) of $78,760 in cash. The estimated useful life of the equipment is eight years, and the salvage value is $6,000. 5 Paid $240 freight on the new equipment 6 Paid $1,650 to repair damages to floor caused when the store equipment was accidentally dropped as it was moved into place 7 Paid $55 for an umbrela holder to place inside front door (customers may place wet umbrellas in the holder). The holder is expected to last 20 years

Explanation / Answer

JOURNAL ENTRIES DATE ACCOUNTS TITLE AND EXPLANATIONS DEBIT $ CREDIT $ 1 land Dr. (900,000/800,000*80000) 90,000 Building Dr. (900,000/800,000*720,000) 810,000         Cash Account 900,000 2 Land Improvements Dr. 31200          Cash Account 31200 3 Building Account Dr. 25000      Cash Account 25000 4 Stores Equipment Dr. 78760       Cash Account 78760 5 Stores Equipment Dr. 240       Cash Account 240 6 Repairs expense Dr. 1650        Cash Account 1650 7 Misc. Expense Dr. 55       cash Account 55 JOURNAL ENTRIES DATE ACCOUNTS TITLE AND EXPLANATIONS DEBIT $ CREDIT $ 1 Depreciation Expense-Equipment 19750     Acumulated Depreciation-Equipment 19750 2 Depreciation Expense-Building 31000        Accumulated Depreciation-Building 31000 3 Depreciation Expense-Land Improvements 2600      Accumulated Depreciation-Land improvements 2600

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