On April 1, 2017, Kingbird Company received a condemnation award of $516,000 cas
ID: 2609969 • Letter: O
Question
On April 1, 2017, Kingbird Company received a condemnation award of $516,000 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 $72,000 and $336,000, respectively, when they were acquired. At April 1, 2017, the accumulated depreciation relating to the building amounted to $192,000. On August 1, 2017, Kingbird purchased a piece of replacement property for cash. The new land cost $108,000, and the new building cost $480,000.
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
Date
Account Titles and Explanation
Debit
Credit
April 1
Aug. 1
Explanation / Answer
Date
Account titles and explanation
Debit
Credit
April 1
Cash
$ 5,16,000
Accumulated depreciation - buildings
$ 1,92,000
land
$ 72,000
buildings
$ 3,36,000
gain on disposal of plant assets
$ 3,00,000
April 1
land
$ 1,08,000
Buildings
$ 4,80,000
cash
$ 5,88,000
Date
Account titles and explanation
Debit
Credit
April 1
Cash
$ 5,16,000
Accumulated depreciation - buildings
$ 1,92,000
land
$ 72,000
buildings
$ 3,36,000
gain on disposal of plant assets
$ 3,00,000
April 1
land
$ 1,08,000
Buildings
$ 4,80,000
cash
$ 5,88,000
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