Exercise 10-25 On April 1, 2017, Cheyenne Company received a condemnation award

Question

Exercise 10-25 On April 1, 2017, Cheyenne Company received a condemnation award of $447,200 cash as compensation for the forced sale of the company’s land and building, which stood in the path of a new state highway. The land and building cost $62,400 and $291,200, respectively, when they were acquired. At April 1, 2017, the accumulated depreciation relating to the building amounted to $166,400. On August 1, 2017, Cheyenne purchased a piece of replacement property for cash. The new land cost $93,600, and the new building cost $416,000. Prepare the journal entries to record the transactions on April 1 and August 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit April 1 Aug. 1

Explanation / Answer

Journal

Date Account Name Debit Credit Apr 1 Cash $447200 Accumulated depreciation-buildings 166400 Land $62400 Buildings 291200 Gain on disposal of Plant Assets 260000 (To record disposal of Plant Assets) Aug 1 Land 93600 Buildings 416000 Cash 509600 (To record purchase of new land and building)

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