A partial portion of the balance sheet at December 31, 2012, for the Gusto Corpo
ID: 2788079 • Letter: A
Question
A partial portion of the balance sheet at December 31, 2012, for the Gusto Corporation is presented below: The following transactions occurred during 2013: On January 1, retired equipment with a net book value of $2,000. The equipment was purchased for $8,000. No value was received from the retirement. On January 1, Gusto sold a building with an original 30-year useful life and no estimated salvage value for $90,000 cash. The building was originally purchased on December 31, 2002 for $120,000. Purchased land for $90,000 on April 30. On July 1, Gusto purchased equipment for $30,000 by signing a long-term note payable. Prepared depreciation entries on December 31. Depreciation expense for the year was $40,000 for buildings and $4,500 for equipment. Required: b. Prepare the property and equipment portion of Gusto's balance sheet at December 31, 2013. Balance for 2012 is $923,000.
Explanation / Answer
Date
Account Title
Debit $
Credit $
1-jan-2013
LOSS ON RETIREMENT
2000
ACCUMULATED DEPRECIATION
6000
EQUIPMENT
8000
Date
Account Title
Debit $
Credit $
1-jan-2013
CASH
90000
ACCUMULATED DEPRECIATION(120000*10/30)
40000
GAIN ON SALE
10000
BUILDING
120000
Date
Account Title
Debit $
Credit $
30-APRIL-2013
LAND
90000
CASH
90000
Date
Account Title
Debit $
Credit $
I-JULY-2013
EQUIPMENT
30000
NOTE PAYABLE
30000
Date
Account Title
Debit $
Credit $
31-DEC-2013
Depreciation expense
44500
Accumulated Depreciation-building
40000
Accumulated Depreciation-Equipment
4500
Property & Equipment
Amount $
Amount $
Land
90000
Equipment
30000
Accumulated Depreciation-Equiment(6000-4500)
1500
31500
Total Property and Equipment
121500
Date
Account Title
Debit $
Credit $
1-jan-2013
LOSS ON RETIREMENT
2000
ACCUMULATED DEPRECIATION
6000
EQUIPMENT
8000
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