In early July 2014,

RossiRossi Lighting Ltd. expanded operations and purchased additional equipment at a cost of

$101,000. The company depreciates buildings by thestraight-line method over 20 years with residual value of

$87,000.Due to obsolescence, the equipment has a useful life of only 10 years and is being depreciated by the double-diminishing-balance method with zero residual value.

Capital assets, at cost:

Land. . . . . . . . . . . . . . . . . . . . . . . .

$143,000

Buildings. . . . . . . . . . . . . . . . . . . . .

705,000

Less: Accumulated depreciation. . . . .

(87,700)

Equipment. . . . . . . . . . . . . . . . . . . .

403,000

Less: Accumulated depreciation. . . . .

(266,000)

Requirement 1. Journalize

RossiRossi

Lighting Ltd.'s capital equipment purchase and depreciation transactions for 2014.

Begin by journalizing the capital asset purchase. (Record debits first, then credits. Explanations are not required.)

Journal Entry
		Accounts	Debit	Credit

Next, journalize the depreciation on the buildings.

Journal Entry
		Accounts	Debit	Credit

Now, journalize the depreciation on the equipment.

Journal Entry
		Accounts	Debit	Credit

Requirement 2. Report capital assets on the December 31, 2014, balance sheet. (Enter the assets in the same order as the balance sheet given in theproblem.)

Rossi Lighting Ltd.
Balance Sheet (Partial)
December 31, 2014
	Property, plant and equipment
		Total Property, plant and equipment