At December 31, 2017, Ayayai Corporation reported the following plant assets. 5,

Question

At December 31, 2017, Ayayai Corporation reported the following plant assets. 5,238,000 Land Buildings Less: Accumulated depreciation- buildings Equipment Less: Accumulated depreciation equipment Total plant assets $26,730,000 20,821,050 69,840,000 5,908,9so 8,730,000 61,110,000 $72,256,950 During 2018, the following selected cash transactions occurred Apr. Purchased land for $3,841,200 May 1Sold equipment that cost $1,047,600 when purchased on January 1, 2011. The equipment was sold for $296,820 June 1 Sold land for $2,793,600. The land cost $1,746,000. July Purchased equipment for $1,920,600 Dec. 31 Retired equipment that cost $1,222,200 when purchased on December 31, 2008. No salvage value was received (a) Your answer is partially correct. Try again. ournalize the transactions. Ayayai 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. (Record entries in the order displayed in the problem statement. 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.

Explanation / Answer

Answer a. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1-Apr-17 Land                                                               Dr.          3,841,200 To Cash          3,841,200 (Record the land purchased) 1-May-17 Depreciation Expenses                          Dr.                34,920 To Accumulated Depreciation - Equip.                34,920 (Record the Dep. Exp. On Equipment Sold) Dep. Per annum = $1,047,600 / 10 Years = $104,760 Dep. Expenses (Till Apr- 30) = $104,760 X 4/12 = $34,920 Accumulated Depreciation (till May 1, 2017) = ($104,760 X 6 Years) + $34,920 Accumulated Depreciation (till May 1, 2017) = $663,480 1-May-17 Cash                                                                Dr.              296,820 Accumulated Depreciation                   Dr.              663,480 Loss on Sale of Equipment                    Dr.                87,300    To Equipment          1,047,600 (Record the sale of equipment) Book Value of Equipment = $1,047,600 - $663,480 = $384,120 Loss on Sale of Equipment = $384,120 - $296,820 = $87,300 1-Jun-17 Cash                                                                Dr.          2,793,600 To Land          1,746,000 To Gain on sale of Land          1,047,600 (Record the sale of land) Gain on Sale of land = $2,793,600 - $1,746,000 = $1,047,600 1-Jul Equipment                                                   Dr.          1,920,600 To Cash          1,920,600 (record the purchase of equipment) 31-Dec Depreciation Expenses                           Dr.              122,220 To Accumulated Depreciation - Equip.              122,220 (Record the Dep. Exp. On Equipment retired) Depreciation Exp. = $1,222,200 / 10 Years = $122,220 31-Dec Accumulated Depreciatiom - Equip.   Dr.          1,222,200    To Equipment          1,222,200 (record the equipment retired)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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