TransSafe Inc. is a specialty packaging company. TransSafe Inc. produces hard plastic packaging material per customer specifications. The key to the company's success is their flexibility and speed. Recently, the company has experienced significant growth and has determined that they need an additional plant location. On October 1, 2020 the company located an existing building in St. Paul, MN and decided to purchase the land and building. Prior to the purchase of the St. Paul property, the company has, as of September 30, 2020, total PPE of $4,550,000 (see the September 30, 2020 PPE schedule below). Buidling Accum. Depr.- Building $ 1,100,000 The Property, Plant, and Equipment section of TransSafe Inc. as of September 30, 2020 is as follows: $ 3,400,000 Builcing Accumulated Depreciation - Building $3,400,000 $1,100,000 $2,300,000 Equipment $ 4,500,000 Acoum. Depr.- Equipment $ 2,900,000 Equipment Accumulated Depreciaiton - Equipment $4500,000 $2,900,000 $1,600,000 Jard $ 650,000 $4,550,000 Total Property, plant, and Equipment land $ 650,000 Company purchased a building and the attached land on October 1 2020 for $ 1,800,000 Estimated Fair Value 500,000 $ 1,500,000 Land Building Cost $ Estimated Salvage Estimated Useful Life 25,000 25 years Note: The company uses the double-declining-balance method when calculating depreciation expense for buildings. 1 Prepare the journal entry to record the purchase of the building and land. Date Account Debit Credit 2 Prepare the year-end journal entry to recognize depreciation for fiscal year ending December 31, 2020. Date Account Debit Credit 3 Prepare the year-end journal entry to recognize depreciation for fiscal year ending December 31, 2021. Date Account Debit Credit Company purchased equipment on Janaury 1 2021 Equipment Cost Installation cost Trial runs cost $1,200,000 $ 100,000 $ 20,000 $ Estimated Salvage Estimated Useful Life 150,000 12 years Note: The company uses the Straight-line method when calculating depreciation expense for equipment. 1 Prepare the journal entry to record the purchase of the equipment Date Account Debit Credit 2 Prepare the year-end journal entry to recognize depreciation for fiscal year ending December 31, 2021. Date Account Debit Credit Company traded a used truck plus cash for a new truck on December 31 2021 The used truck cost The used truck accumulated depreciation $ $ 55,000 45,000 The company made a cash payment of $ 60,000 The new truck is worth (fair value) $ 65,000 Note: The exchange has commercial substance. NOTE: The company includes trucks in the "Equipment" line of the balance sheet. Prepare the journal entry to record the trade (exchange). Date Account Debit Credit The following journal entries were made by TransSafe Inc. for the existing fixed assets (assets as of September 30, 2020). Thus, the three transactions you have done the accounting for are not included in the following entries: Credit Date December 31, 2020 Account Depreciation Expense - Building Depeciation Expense - Equipment Accumulated Depreciation - Building Accumulated Depreciation - Equipment $ $ Debit 125,000 150,000 $ $ 125,000 150,000 December 31, 2021 $ $ 100,000 150,000 Depreciation Expense - Building Depeciation Expense - Equipment Accumulated Depreciation - Building Accumulated Depreciation - Equipment $ $ 100,000 150,000 Prepare the property, Plant, and Equipment schedule for December 31, 2021. Refer to page 1 (September 30, 2020 - PPE schedule) for format example. TransSafe Inc. is a specialty packaging company. TransSafe Inc. produces hard plastic packaging material per customer specifications. The key to the company's success is their flexibility and speed. Recently, the company has experienced significant growth and has determined that they need an additional plant location. On October 1, 2020 the company located an existing building in St. Paul, MN and decided to purchase the land and building. Prior to the purchase of the St. Paul property, the company has, as of September 30, 2020, total PPE of $4,550,000 (see the September 30, 2020 PPE schedule below). Buidling Accum. Depr.- Building $ 1,100,000 The Property, Plant, and Equipment section of TransSafe Inc. as of September 30, 2020 is as follows: $ 3,400,000 Builcing Accumulated Depreciation - Building $3,400,000 $1,100,000 $2,300,000 Equipment $ 4,500,000 Acoum. Depr.- Equipment $ 2,900,000 Equipment Accumulated Depreciaiton - Equipment $4500,000 $2,900,000 $1,600,000 Jard $ 650,000 $4,550,000 Total Property, plant, and Equipment land $ 650,000 Company purchased a building and the attached land on October 1 2020 for $ 1,800,000 Estimated Fair Value 500,000 $ 1,500,000 Land Building Cost $ Estimated Salvage Estimated Useful Life 25,000 25 years Note: The company uses the double-declining-balance method when calculating depreciation expense for buildings. 1 Prepare the journal entry to record the purchase of the building and land. Date Account Debit Credit 2 Prepare the year-end journal entry to recognize depreciation for fiscal year ending December 31, 2020. Date Account Debit Credit 3 Prepare the year-end journal entry to recognize depreciation for fiscal year ending December 31, 2021. Date Account Debit Credit Company purchased equipment on Janaury 1 2021 Equipment Cost Installation cost Trial runs cost $1,200,000 $ 100,000 $ 20,000 $ Estimated Salvage Estimated Useful Life 150,000 12 years Note: The company uses the Straight-line method when calculating depreciation expense for equipment. 1 Prepare the journal entry to record the purchase of the equipment Date Account Debit Credit 2 Prepare the year-end journal entry to recognize depreciation for fiscal year ending December 31, 2021. Date Account Debit Credit Company traded a used truck plus cash for a new truck on December 31 2021 The used truck cost The used truck accumulated depreciation $ $ 55,000 45,000 The company made a cash payment of $ 60,000 The new truck is worth (fair value) $ 65,000 Note: The exchange has commercial substance. NOTE: The company includes trucks in the "Equipment" line of the balance sheet. Prepare the journal entry to record the trade (exchange). Date Account Debit Credit The following journal entries were made by TransSafe Inc. for the existing fixed assets (assets as of September 30, 2020). Thus, the three transactions you have done the accounting for are not included in the following entries: Credit Date December 31, 2020 Account Depreciation Expense - Building Depeciation Expense - Equipment Accumulated Depreciation - Building Accumulated Depreciation - Equipment $ $ Debit 125,000 150,000 $ $ 125,000 150,000 December 31, 2021 $ $ 100,000 150,000 Depreciation Expense - Building Depeciation Expense - Equipment Accumulated Depreciation - Building Accumulated Depreciation - Equipment $ $ 100,000 150,000 Prepare the property, Plant, and Equipment schedule for December 31, 2021. Refer to page 1 (September 30, 2020 - PPE schedule) for format example