Lamborghini, Inc., has the following plant asset accounts: Land, Buildings, and Equipment, with a separate accumulated depreciation account for each of these except land. Lamborghini completed the following transactions:
Jan. 2 Traded in equipment with accumulated depreciation of $67,000 (cost of $130,000) for similar new equipment with a cash cost of $176,000. Received a trade-in allowance of $70,000 on the old equipment and paid $106,000 in cash.
June 30 Sold a building that had a cost of $650,000 and had accumulated depreciation of $145,000 through December 31 of the preceding year. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $250,000. Lamborghini received $100,000 cash and a $400,000 note receivable.
Oct. 29 Purchased land and a building for a single price of $420,000. An independent appraisal valued the land at $150,000 and the building at $300,000. (p. 371) Dec. 31 Recorded depreciation as follows:
Equipment has an expected useful life of 6 years and an estimated residual value of 5% of cost. Depreciation is computed on the double-declining-balance method.
Depreciation on buildings is computed by the straight-line method. The new building carries a 40-year useful life and a residual value equal to 10% of its cost.
Required
Record the transactions in Lamborghini, Inc's., journal.