Sin City Entertainment owns a number of casinos in Las Vegas and has decided to expand to Atlantic City. Prepare the entries to report the following activity, and show how this activity changes Sin Citys 2015 year-end financial statements.

On January 1, 2015, Sin City invested $110 million in a casino in Atlantic City. At the time of the purchase, the land was appraised for $10 million and the building was appraised at $100 million.

During 2015, Sin City invested another $50 million into renovating the casino.

Sin Citys management determines that the casino has a useful life of 40 years and a $30 million salvage value. Sin City uses the straight line method of depreciation.

DATE

ACCOUNT NAME

DEBIT

CREDIT

BALANCE SHEET

INCOME STMT

A

=

L

+

E

R

-

E

01/01/15

12/31/15

12/31/15

Statement of Cash Flows				2015
	Purchase and renovation

Income Statement
	Depreciation expense

Balance Sheet
	Cash
	Land
	Buildings, net
	Total Assets
	Retained earnings
	Total Liabilities & Equity

Fast forward to the end of 2020: Sin City is presented with an offer for the Atlantic City casino that it cant refuse. Corleone Gaming pays Sin City $120 million for the casino. Assume 2020 depreciation expense has already been recorded at the time of the sale. Record the entry made by Sin City on December 30, 2020, to reflect the sale of the casino.

DATE

ACCOUNT NAME

DEBIT

CREDIT

BALANCE SHEET

INCOME STMT

A

=

L

+

E

R

-

E

12/30/20

Statement of Cash Flows				2020
	Sale of casino (I)

Income Statement
	Loss on sale

Balance Sheet
	Cash
	Land
	Buildings, net
	Total Assets
	Retained earnings
	Total Liabilities & Equity