Problem
At December 31, 2014, Navaro Corporation reported the following plant assets.
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Land
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$ 3,873,000
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Buildings
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$31,170,000
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Less: Accumulated depreciation-buildings
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15,395,175
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15,774,825
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Equipment
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51,640,000
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Less: Accumulated depreciation-equipment
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6,455,000
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45,185,000
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Total plant assets
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$64,832,825
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During 2015, the following selected cash transactions occurred.
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Apr.1
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Purchased land for $2,840,200.
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May 1
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Sold equipment that cost $774,600 when purchased on January 1, 2008. The equipment was sold for $219,470.
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June 1
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Sold land for $2,065,600. The land cost $1,291,000.
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July 1
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Purchased equipment for $1,420,100.
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Dec.31
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Retired equipment that cost $903,700 when purchased on December 31, 2005. No salvage value was received.
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Journalize the transactions. Navaro uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 40-year useful life and no salvage value; the equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement.
Record adjusting entries for depreciation for 2015.
Prepare the plant assets section of Navaro's balance sheet at December 31, 2015. (Hint: You may wish to set up T accounts, post beginning balances, and then post 2015 transactions.)
Exercise 9-8
Here are selected 2014 transactions of Cleland Corporation.
Jan. 1 Retired a piece of machinery that was purchased on January 1, 2004. The machine cost $61,230 and had a useful life of 10 years with no salvage value.
June 30 Sold a computer that was purchased on January 1, 2012. The computer cost $35,000 and had a useful life of 4 years with no salvage value. The computer was sold for $4,740 cash.
Dec. 31 Sold a delivery truck for $9,270 cash. The truck cost $23,590 when it was purchased on January 1, 2011, and was depreciated based on a 5-year useful life with a $3,740 salvage value.
Journalize all entries required on the above dates, including entries to update depreciation on assets disposed of, where applicable. Cleland Corporation uses straight-line depreciation.
Attachment:- Problems.rar