At December 31, 2019, Grand Company reported the following as plant assets. During 2020, the following selected
Question:
At December 31, 2019, Grand Company reported the following as plant assets.
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During 2020, the following selected cash transactions occurred.
April 1 Purchased land for $2,130,000.
May 1 Sold equipment that cost $750,000 when purchased on January 1, 2016. The equipment was sold for $450,000.
June 1 Sold land purchased on June 1, 2010, for $1,500,000. The land cost $400,000.
July 1 Purchased equipment for $2,500,000.
Dec. 31 Retired equipment that cost $500,000 when purchased on December 31, 2010. The company received no proceeds related to salvage.
Instructions
(a) 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 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.
(b) Record adjusting entries for depreciation for 2020.
(c) Prepare the plant assets section of Grand's balance sheet at December 31, 2020.
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
a April1 Land 2130000 Cash 2130000 May 1 Depreciation Expense 25000 Accumulated Depreciation Equipme...View the full answer
Financial Accounting
ISBN: 978-1119305736
10th edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel
