Question p1032a version 10 For some reason I cant copy and p

Question p10-32a version 10. For some reason I can\'t copy and paste the whole question. In looking at the explanation in Chegg there were 29 steps. I am sure that isn\'t all just the journal entries needed??

Gretta Chung Associates survey American eating habits. The companies accounts include land, building, office equipment, and communication equipment with separate accumulated depreciation account for each asset. During 2014 Chung Completed the following transactions:

Jan. 1 Purchased office equipment, $119,000. Paid $80,000 cash and financed the

remaining with a note payable.

Apr. 1 Acquired land and communication equipment in a lump-sum purchase. Total

cost was $270,000 paid in cash. An independent appraisal valued the land at

$212,625 and the communication equipment at $70,875.

Sep. 1 Sold a building that cost $555,000 (accumulated depreciation of $255,000

through December 31 of the preceding year). Chung received $370,000 cash

from the sale of the building. Depreciation is computed on a straight-line basis.

The building has a 40-year useful life and a residual value of $75,000.

Dec. 31 Recorded depreciation as follows:

Communication equipment is depreciated by the straight-line method over a

five-year life with zero residual value.

Office equipment is depreciated using the double-declining-balance method over

five years with a $2,000 residual value.

Question: Record transactions in the journal of Gretta Chung Associates

Solution

Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1-Jan Office Equipment    119,000.00 Cash          80,000.00 Notes Payable          39,000.00 (Record the purchase of office equipment) 1-Apr Land    202,500.00 Commnication Equipment      67,500.00 Cash        270,000.00 (Record the purchase of Land & Communication Equipment) Fair Value Weights Amount Allocated Land          212,625 75%              202,500 Equipment            70,875 25%                 67,500          283,500              270,000 1-Sep Depreciation Expenses        8,000.00 Accumulated Depreciation - Building            8,000.00 (Record the depreciation on machinery sold upto Sep-1) Depreciation Per Annum = ($555,000 - $75,000) / 40 Years Depreciation Per Annum = $12,000 Dep. Expenses upto Sep-1 = $12,000 X 8/12 = $8,000 1-Sep Cash    370,000.00 Accumulated Depreciation - Building    263,000.00 Building        555,000.00 Gain on Sale of Building          78,000.00 (Record the Sale of Building) Cost of Building    555,000.00 Less: Accumulated Dep. - $255,000 + $8,000    263,000.00 WDV as on Sep-1    292,000.00 Sale Price of Building    370,000.00 Less: WDV of Building    292,000.00 Gain on Sale of Building      78,000.00 31-Dec Depreciation Expenses      10,125.00 Accumulated Depreciation - Communication Equip.          10,125.00 (Record the depreciation on Communication Equipment) Dep. Per Annum - ($67,500 - $0) / 5 Years = $13,500 Dep. Exp. - 2014 = $13,500 X 9/12 = $10,125 31-Dec Depreciation Expenses      47,600.00 Accumulated Depreciation - Office Equip.          47,600.00 (Record the depreciation on Office Equipment) Rate of Dep Under DDBM = 2 X 20% (Rate of dep. Under Straight Line Method) Rate of Dep Under DDBM = 40% Dep. Under DDBM = $119,000 X 40% = $47,600