Gloria Roper Associates surveys american eating habits. The company\'s accounts
ID: 2467086 • Letter: G
Question
Gloria Roper Associates surveys american eating habits. The company's accounts include land, buildings, office equipment, and communication equipment, with a separate Accumulated Depreciation account for each asset. During 2016, Gloria Roper completed the following transactions:
Jan. 1
Purchased office equipment, $120,000. Paid $76,000 cash and financed the remaining with a note payable.
Apr. 1
Acquired land and communication equipment in a lump-sum purchase. Total cost was $430,000 paid in cash. An independent appraisal valued the land at $338,625 and the communication equipment at $112,875.
Sep. 1
Sold a building that cost $540,000 (accumulated depreciation of $240,000 through December 31 of the preceding year). Gloria Roper received $420,000 cash from the sale of the building. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $60,000.
Dec. 31
Recorded depreciation as follows:
Communication equipment is depreciated by the straight-line method over a five-year life with zero residual value.
Office equipment is depreciated using the double-declining-balance method over five years with a $1,000 residual value.
Record the transactions in the journal of Gloria Roper Associates.
Jan. 1
Purchased office equipment, $120,000. Paid $76,000 cash and financed the remaining with a note payable.
Apr. 1
Acquired land and communication equipment in a lump-sum purchase. Total cost was $430,000 paid in cash. An independent appraisal valued the land at $338,625 and the communication equipment at $112,875.
Sep. 1
Sold a building that cost $540,000 (accumulated depreciation of $240,000 through December 31 of the preceding year). Gloria Roper received $420,000 cash from the sale of the building. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $60,000.
Dec. 31
Recorded depreciation as follows:
Communication equipment is depreciated by the straight-line method over a five-year life with zero residual value.
Office equipment is depreciated using the double-declining-balance method over five years with a $1,000 residual value.
Explanation / Answer
Journal Entries:
Date
Account titles / Explanations
Debit
Credit
Jan. 1
Office Equipment
$ 120,000.00
Cash
$ 76,000.00
Notes Payable (120000-76000)
$ 44,000.00
(Purchased office equipment, $120,000. Paid $76,000 cash and financed the remaining with a note payable.)
Apr. 1
Land (338625*430000) / (338625+112875)
$ 322,500.00
Communication equipment (112875*430000) / (338625+112875)
$ 107,500.00
Cash
$ 430,000.00
(Acquired land and communication equipment in a lump-sum purchase. )
Sep. 1
Cash
$ 420,000.00
Accumulated Depreciation
$ 240,000.00
Building
$ 540,000.00
Gain on sale of Building (420000+240000 - 540000)
$ 120,000.00
(Being building sold for cash)
Dec. 31
Depreciation Expense- Communication equipment (107500-0) / 5
$ 21,500.00
Accumulated Depreciation- Communication equipment
$ 21,500.00
(Being depreciation recorded for Communication equipment)
Depreciation Expense- Office Equipment (120000*2/5)
$ 48,000.00
Accumulated Depreciation- Office Equipment
$ 48,000.00
(Being depreciation recorded for Office Equipment)
Journal Entries:
Date
Account titles / Explanations
Debit
Credit
Jan. 1
Office Equipment
$ 120,000.00
Cash
$ 76,000.00
Notes Payable (120000-76000)
$ 44,000.00
(Purchased office equipment, $120,000. Paid $76,000 cash and financed the remaining with a note payable.)
Apr. 1
Land (338625*430000) / (338625+112875)
$ 322,500.00
Communication equipment (112875*430000) / (338625+112875)
$ 107,500.00
Cash
$ 430,000.00
(Acquired land and communication equipment in a lump-sum purchase. )
Sep. 1
Cash
$ 420,000.00
Accumulated Depreciation
$ 240,000.00
Building
$ 540,000.00
Gain on sale of Building (420000+240000 - 540000)
$ 120,000.00
(Being building sold for cash)
Dec. 31
Depreciation Expense- Communication equipment (107500-0) / 5
$ 21,500.00
Accumulated Depreciation- Communication equipment
$ 21,500.00
(Being depreciation recorded for Communication equipment)
Depreciation Expense- Office Equipment (120000*2/5)
$ 48,000.00
Accumulated Depreciation- Office Equipment
$ 48,000.00
(Being depreciation recorded for Office Equipment)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.