Regal Freightway provides freight service. The company’s balance sheet includes Land, Buildings, and Motor-Carrier Equipment. Regal Freightway uses a separate accumulated depreciation account for each depreciable asset. During 2010, Regal Freightway completed the following transactions:

Requirement 1. Record the transactions in Regal Freight way’s journal.

Transcribed Image Text:

Traded in motor-carrier equipment with accumulated depreciation of $90,000 (cost of $130,000) for new equipment with a cash cost of $176,000. Regal Freightway received a trade-in allowance of $70,000 on the old equipment and paid the remainder in cash. Jul 1 Sold a building that cost $550,000 and had accumulated depreciation of $250,000 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 $50,000. Regal Freightway received $100,000 cash and a $600,000 note receivable. Oct 31 Purchased land and a building for a cash payment of $300,000. An independent appraisal valued the land at $115,000 and the building at $230,000. Dec 31 Recorded depreciation as follows: New motor-carrier equipment has an expected useful life of 1 million miles and an estimated residual value of $26,000. Depreciation method is the units-of-production method. During the year, Regal Freightway drove the truck 150,000 miles. Depreciation on buildings is straight-line. The new building has a 40-year useful life and a residual value equal to $20,000.