tice Gradebook ORION Downloadable eTextbook ment Problem 9-5A At December 31, 20
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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 E 3,005,000 18,277,000 4,681,000 35,966,000 57,248,000 29,047,000 10,770,000 40,647,000 Total plant assets 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 Explanation Debit Credit Policy 1 S 2000-2018 John wiley & Sons. Inc. All Rights Reserved. A Division of 20hn Wilcy &Sons; IncExplanation / Answer
Answer 1. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1-Apr-17 Land 2,242,000.00 Cash 2,242,000.00 (To record the purchase of land) 1-May-17 Depreciation Expense - Equipment 26,300.00 $789,000 / 10 Years X (4/12) Accumulated Depreciation - Equipment 26,300.00 (To record depreciation) 1-May-17 Cash 489,180.00 Accumulated Depreciation - Equipment 341,900.00 ($789,000 / 10 Years) X 4 Years + $26,300 Equipment 789,000.00 Gain on Sale of Equipment 42,080.00 $489,180 - ($789,000 - $341,900) (To record the sale of equipment) 1-Jun-17 Cash 1,741,000.00 Land 306,000.00 Gain on sale of Land 1,435,000.00 $1,741,000 - $306,000 (To record the sale of Land) 1-Jul-17 Equipment 2,225,000.00 Cash 2,225,000.00 (To record the purchase of Equipment) 31-Dec-17 Depreciation Expense - Equipment 52,600.00 $526,000 / 10 Years Accumulated Depreciation - Equipment 52,600.00 (To record depreciation on equipment retired) 31-Dec-17 Accumulated Depreciation - Equipment 526,000.00 Equipment 526,000.00 (To record retirement of equipment) 31-Dec-17 Depreciation Expense - Building 580,940.00 $29,047,000 / 50 Years Accumulated Depreciation - Building 580,940.00 (To record Building depreciation) 31-Dec-17 Depreciation Expense - Equipment 4,044,450.00 Accumulated Depreciation - Equipment 4,044,450.00 (To record equipment depreciation) Depreciation on Equipment - Old = ($40,647,000 - $789,000 - $526,000) / 10 Years Depreciation on Equipment - Old = $39,332,000 / 10 Years Depreciation on Equipment - Old = $3,933,200 Depreciation on Equipment - Purchased in 2017 = ($2,225,000 / 10 Years) X 6/12 Depreciation on Equipment - Purchased in 2017 = $111,250 Total Depreciation - Equipment - 2017 = $3,933,200 + $111,250 Total Depreciation - Equipment - 2017 = $4,044,450 Answer 2. SKYSONG SA Partial Statement of Financial Position December 31, 2017 Property, Plant & Equipment Land - $3,005,000 + $2,242,000 - $306,000 4,941,000.00 Buildings 29,047,000.00 Accumulated Depreciation - Buildings (11,350,940.00) 17,696,060.00 Equipment - $40,647,000 - ($789,000 + $526,000) + $2,225,000 41,557,000.00 Accumulated Depreciation - Equipment (8,620,250.00) 32,936,750.00 Total Property, Plant & Equipment 55,573,810.00
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