tice Gradebook ORION Downloadable eTextbook ment Problem 9-5A At December 31, 20
ID: 2558782 • Letter: T
Question
tice Gradebook ORION Downloadable eTextbook ment Problem 9-5A At December 31, 2016, Skysong SA reported the following as plant assets. Land Buildings Less: Accumulated depreciation-buildings Equipment Less: Accumulated depreciation equipment 3,005,000 29,047,000 10,770,000 18,277,000 40,647,000 4,681,000 35,966,000 Total plant assets 57,248,000 During 2017, the following selected cash transactions occurred April 1 Purchased land for 2,242,000 May 1 Sold equipment that cost 789,000 when purchased on January 1, 2013. The equipment was sold for 489,180. June 1 Sold land purchased on June 1, 2007 for 1,741,000. The land cost 306,000 July 1 Purchased equipment for 2,225,000, Dec. Retired equipment that cost 526,000 when purchased on December 31, 2007. No residual value was 1 received. Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no residual value. The equipment is estimated to have a 10- year useful life and no residual value. Update depreciation on assets disposed of at the time of sale or retirement. (Credit account titles are automatically indented when amount is entered. Do not indent manually) Date Account Titles and Explanatiorn Debit Credit Policy 1 S 2000-2018 John wiley &Sons.Inc.; All Rights Reserved. A Division of 30hn Wilcy &Sons; IncExplanation / Answer
* Depreciation upto Dec. 31, 2016 = 789000/10 x 4 = 315600
Depreciation for 2017 = 789000/10 x 4/12 = 26300
Accumulated depreciation on date of sale = 315600 + 26300 = 341900
** Depreciation upto Dec. 31, 2016 = 526000/10 x 9 = 473400
Depreciation for 2017 = 526000/10 = 52600
Accumulated depreciation on date of retirement = 473400 + 52600 = 526000
*** Depreciation on beginning balance = (40647000 - 789000 - 526000)/10 = 39332000/10 = 3933200
Depreciation on newly purchased = 2225000/10 x 6/12 = 111250
Depreciation for 2017 = 3933200 + 111250 = 4044450
Date Account Titles and Explanation Debit Credit Apr. 1, 2017 Land 2242000 Cash 2242000 (To record purchase of land) May 1, 2017 Depreciation expense (789000/10 x 4/12) 26300 Accumulated depreciation-equipment 26300 (To record depreciation) May 1, 2017 Cash 489180 Accumulated depreciation-equipment* 341900 Equipment 789000 Gain on sale of equipment 42080 (To record sale of equipment) Jun. 1, 2017 Cash 1741000 Land 306000 Gain on sale of land 1435000 (To record sale of land) Jul. 1, 2017 Equipment 2225000 Cash 2225000 (To record purchase of equipment) Dec. 31, 2017 Depreciation expense (526000/10) 52600 Accumulated depreciation-equipment 52600 (To record depreciation) Dec. 31, 2017 Accumulated depreciation-equipment** 526000 Equipment 526000 (To record retirement of equipment) Dec. 31, 2017 Depreciation expense (29047000/50) 580940 Accumulated depreciation-building 580940 (To record building depreciation) Dec. 31, 2017 Depreciation expense*** 4044450 Accumulated depreciation-equipment 4044450 (To record equipment depreciation)Related Questions
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