SA At December 31, 2017, Grand Company reported the following as plant assets. J
ID: 2570193 • Letter: S
Question
SA At December 31, 2017, Grand Company reported the following as plant assets. Journalize a seriesof Land Buildings Less: Accumulated depreciation-buildings $28,500,000 12,100,000 48,000,000 5,000,000 s 4,000,000 16,400,000 43,000,000 equipment transactions related to purchase, sale, retirement, and depreciation. (LO 2, 3, 5) uipment ccumulated depreciation-equipment Total plant assets $63,400,000 XLS uring 2018, the following selected cash transactions occurred. April 1 Purchased land for $2,130,000. May 1 Sold equipment that cost $750,000 when purchased on January 1, 2014. The equipment was sold for $450,000. June Sold land purchased on June 1, 2008, for $1,500,000. The land cost $400,000. July 1 Purchased equipment for $2,500,000. Dec. 31 Retired equipment that cost $500,000 when purchased on December 31, 2008. The company received no proceeds related to salvage. Instructions (a) 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 (b) Depreciation Expense- salvage value. The equipment is estimated to have a 10-year useful life and no salvage Buildings $570,000 value. Update depreciation on assets disposed of at the time of sale or retirement. Equipment $4,800,000 (c) Total plant assets (b) Record adjusting entries for depreciation for 2018. (c) Prepare the plant assets section of Grand's balance sheet at December 31, 2018. 561,760,000Explanation / Answer
To Equipment a/c
50,000
S.No Particulars Dr. Amount Cr. Amount Apr-01 Land a/c Dr. 21,30,000 To Cash/Bank a/c 21,30,000 May-01 Depreciation a/c Dr. 25,000 To Accumulated Depreciation- Equipment 25,000 (4 months depreciation) To Accumulated Depreciation- Equipment a/c Dr. 3,25,000 to Equipment a/c 3,25,000 Bank a/c Dr. 4,50,000 To Equipment a/c 425000 To Profit on sale of Equipment a/c 25000 Jun-01 Bank a/c Dr. 15,00,000 To Land a/c 4,00,000 To Profit on sale of land 11,00,000 Jul-01 Equipment a/c Dr. 25,00,000 To Bank a/c 25,00,000 Dec-31 Depreciation a/c Dr. 50,000To Equipment a/c
Depreciation Calculation Cost Total Life Depreciation Land 36,00,000 Buildings 285,00,000 50 5,70,000 Equipment Opening Balance 480,00,000 Less: Sold -7,50,000 Less; Retired -5,00,000 467,50,000 10 46,75,000 Purchased 25,00,000 10 1,25,000 Total Depreciation 53,70,00050,000
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