During the current year, Hitchcock Developers disposed of plant assets in the following transactions. Feb. 10 office equipment costing $24,000 was given to a scrap dealer at no charge. At the date of disposal acclated depreciation on the office equipment amounted to $21.500. Apr. 1 Hitchcock sold land and a building to Claypool Associates for $900.000, receiving $100,000 cash and year. 9 persent note receivable for the remaining balance. Hitchcock's records showed the following count: Land. 558,000: Building. $550.000 Accumulated Depreciation Building (at the date of disposal). $260,000 Aug.15 Hitchcock traded in an old truck for a new one. The old truck had cost $26,000, and its accumulated depreciation mounted to $18,000. The list price of the new truck was 539,000, but Hitchcock received $10,000 trade-in allowance for the old truck and paid $25,000 in cash. Hitchcock includes trucks in its Vehicles account Oct. 1 Hitchcock traded in its old computer system as part of the purchase of new systes. The old system med cost $15,000 and its accumulated depreciation amounted to $11,000. The new computer's list price was $5,000. Hitchcock accepted trade in allowance of 5500 for the old computer systen, paying $1,500 down in cash and issuing 1-year. A percent not payable for the $6,000 balance owed. Required: a. Prepare journal entries to record each of the disposal transactions. Assume that depreciation expense on each asset has been recorded up to the date of disposal. Thus, you need not update the accumulated depreciation figures stated in the problem b. Do gains and losses on asset disposals affect gross profit? Answer is not complete. Complete this question by entering your answers in the tabs below. on expense on each asset has been up to the date of disposal. Thus, you need not update the accumulated depreciation figures stated in the problem. (If entry is required for a transaction/event, select "No journal entry required in the first account field.) o Date Feb 10 Credit General Journal Loss on disposal of plant assets Accumulated depreciation Office equipment Debit 2.2000 2,200 Apr 01 100.000 800,000 Cash Notes receivable Building Land Gain on disposal of plant assets 08 550,000 $ 5,000 550.000 Aug 15 Vehicles (new truck) Accumulated depreciation Building Loss on disposal of plant assets Cash Vehicles (old truck) 29.000 18.000 7,000 X O 28,000 26.000 Oct 01 7.500 11.000 Office equipment (new computer) Accumulated depreciation Office equipment (new computer) Loss on disposal of plant assets Cash Notes payable Office equipment (old computer) 4,000 O 1,500 6.000 15.000 Required B > Required A Required B Do gains and losses on asset disposals affect gross profit? Do gains and losses on asset disposals affect gross profit?
