At December 31, 2014, Navaro Corporation reported the following plant assets. La

Question

At December 31, 2014, Navaro Corporation reported the following plant assets. Land $ 3,510,000 Buildings $26,650,000 Less: Accumulated depreciation—buildings 13,952,250 12,697,750 Equipment 46,800,000 Less: Accumulated depreciation—equipment 5,850,000 40,950,000 Total plant assets $57,157,750 During 2015, the following selected cash transactions occurred. Apr. 1 Purchased land for $2,574,000. May 1 Sold equipment that cost $702,000 when purchased on January 1, 2008. The equipment was sold for $198,900. June 1 Sold land for $1,872,000. The land cost $1,170,000. July 1 Purchased equipment for $1,287,000. Dec. 31 Retired equipment that cost $819,000 when purchased on December 31, 2005. No salvage value was received.

1) Journalize the transactions. Navaro uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 40-year useful life and no salvage value; the equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement.

Explanation / Answer

DATE ACCOUNT TITLE DEBIT CREDIT APR 1 LAND $2574000 CASH $2574000 MAY 1 CASH $198900 ACCUMULATED DEPRICIATION $514800 EQUIPEMENT $702000 PROFIT ON DISPOSAL $11700 JUNE 1 CASH 1872000 LAND 1170000 PROFIT ON DISPOSAL 702000 JULY 1 EQUIPEMENT 1287000 CASH 1287000 DEC 31 ACCUMULATED DEPRICIATION $819000 EQUIPEMENT $819000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.