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-32A Recording lump-sum asset purchases, depreciation, and disposals Learning Objectives 1, 2,3 Ellie Johnson Associates surveys American eating habits. The company's accounts include Land, Buildings,
-32A Recording lump-sum asset purchases, depreciation, and disposals Learning Objectives 1, 2,3 Ellie Johnson Associates surveys American eating habits. The company's accounts include Land, Buildings, Office Equipment, and Communication separate Accumulated Depreciation account for each depreciable asset. During 2018, Ellie Johnson Associates completed the following transactions: Sep. 1 Gain $193,250 Jan. 1 Purchased office equipment, $113,000. Paid $80,000 cash and financed the remainder with a note payable. Apr. 1 Acquired land and communication equipment in a lump-sum purchase. Total cost was $310,000 paid in cash. An independent appraisal valued the land at $244,125 and the communication equipment at $81,375 Sold a building that cost $520,000 (accumulated depreciation of $285,000 through December 31 of the preceding year). Ellie Johnson Associates received $420,000 cash from the sale of the building. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $25,000 Sep. 1 Dec. 31 Recorded depreciation as follows: Communication equipment is depreciated by the straight-line method over a five-year life with zero residual value Office equipment is depreciated using the double-declining-balance method over five years with a $1,000 residual value. Record the transactions in the journal of Ellie Johnson Associates
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