5.00 points During the current year, Hong Developers disposed of plant assets in

Question

5.00 points During the current year, Hong Developers disposed of plant assets in the following transactions F1 Office equipment costing $260,000 was given to a scrap dealer at no charge. At the date of disposal, accumulated depreciation on the office equipment amounted to $258,000. Apr 1 Hong sold land and a building to Claypool Associates for $9,000,000, receiving $1,000,000 cash and a five-year, 9 percent note receivable for the remaining balance. Hong's records showed the following amounts: Land, $500,000: Building, $5,500,000; Accumulated Depreciation: Building (at the date of disposal), $2,500,000. Aug 15 Hong traded in an old truck for a new one. The old truck had cost $260,000, and its accumulated depreciation amounted to $180,000. The list price of the new truck was $390,000, but Hong received a 100,000 trade-in allowance for the old truck and paid only $290,000 in cash. Hong includes trucks in its Vehicles account Oct 1 Hong traded in its old computer system as part of the purchase of a new system. The old system had cost $150,000, and its accumulated depreciation amounted to $110,000. The new computer's list price was $80,000. Hong accepted a trade-in allowance of $5,000 for the old computer system, paying $15,000 down in cash and issuing a one-year, 8 percent note payable for the $60,000 balance owed Prepare journal entries to reoord each of the disposal transactions. Assume that depreciation expense on each asset has been recorded up to the date of disposal. Thus, you need not update the accumulated depreciation figures stated in the problem. (Omit the "$" sign in your response.) General Joumal Feb. 10 Ofice equipmant Difficulty Medium

Explanation / Answer

3.

Cost of new bus = $89,800

Trade in allowance =$59,900

a. Cash payment =$29,900

HONG DEVELOPERS Date Account Debit Credit Feb.10 Loss on disposal of office equipment 2000 Accumulated depreciation - office equipment 258000 Office equipment 260000 (To record disposal of equipment ) Apr.1 Cash 1000000 Note receivable 8000000 Accumulated depreciation - building 2500000 Land 500000 Building 5500000 Gain on disposal of land and buliding 5500000 (To record sale of land and building ) Oct.1 Computer system 80000 Trade in value 5000 Cash 15000 Note payable 60000 (To record purchase of computer system) Oct.1 Loss on disposal of computer equipment 35000 Trade in value 5000 Accumulated depreciation - computer system 110000 Computer system 150000 (To record the trede in of old computer system)

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