Pan-Atlantic Shipping Co. has accumulated the following information:

                           Property, Plant & Equipment Accounts at 01/01/2019

                        Land                                                                             $10,000

                        Buildings and equipment                                            $48,000

                        Accumulated depreciation                                          ($15,000)

                        Net                                                                                $33,000

                        Total                                                                             $43,000

 

Investing Activities from SCF for 2019

                        Sale of building (historical cost = $10,000)                  $8,000

                        Purchase of land                                                                 ?

                        Purchase of building and equipment                          ($30,000)

                        Net cash used by investing activities                          ($40,000)                                                

 

                          Selected Accounts from the 2019 Income Statement

                        Depreciation expense                                                   $11,000

                        Gain on sale on building                                                 $4,000

                        Cost of goods sold                                                      $107,200

Required:

1. How much was paid for the land acquired in 2019?

2. How was the gain on sale of the building determined?  Show calculations.

3. How is the gain on the sale of the building treated on the Statement of Cash Flows?

4. Determine the adjusted balances for all property, plant, and equipment accounts at December 31, 2019. Suggestion:  Use T Accounts.