Problem 105A Part Level Submission At December 31 2017 Grand

Problem 10-5A (Part Level Submission)

At December 31, 2017, Grand Company reported the following as plant assets.

During 2018, the following selected cash transactions occurred.

Retired equipment that cost $514,000 when purchased on December 31, 2008. No salvage value was received.

Land				$ 3,670,000
Buildings		$27,580,000
Less: Accumulated depreciation—buildings		12,950,000		14,630,000
Equipment		48,100,000
Less: Accumulated depreciation—equipment		4,630,000		43,470,000
Total plant assets				$61,770,000

Date Account Titles and Explanation Debit Credit Apr. 1 ?|Land 2040000 Cash 2040000 May 1 Depreciation Expense 38000 Accumulated Depreciation-Equipment 38000 To record depreciation) May 1 |Cash 684000 Accumulated Depreciation-Equipment 494000 Equipment 1140000 Gain on Disposal of Plant Assets 38000 To record sale of equipment) June 1 ?|Cash 1600000 Land 392000 Gain on Disposal of Plant Assets 1208000 July 1 Equipment 2300000 Cash 2300000 Dec. 31 Depreciation Expense 51400 Accumulated Depreciation-Equipment 51400

Solution

Answers

---Building is 50 years
---Equipment is 10 years

LAND

Cost

1

Original Land

$           3,670,000.00

Sold

$            (392,000.00)

Remaining

$           3,278,000.00

2

Land Purchased

$           2,040,000.00

Total

$           5,318,000.00

BUILDING

Cost

Accumulated Depreciation

Depreciation expense for 2018

1

Original Buildings

$        27,580,000.00

$ 12,950,000.00

Sold

$                                -  

$                         -  

Remaining

$        27,580,000.00

$ 12,950,000.00

$        551,600.00 [$ 27,580,000 cost / 50 years]

EQUIPMENT

Cost

Accumulated Depreciation

Depreciation expense for 2018

1

Original Equipment

$        48,100,000.00

$    4,630,000.00

Retired

$            (514,000.00)

$     (514,000.00)

Sold

$        (1,140,000.00)

$     (494,000.00)

Remaining

$        46,446,000.00

$    3,622,000.00

$    4,644,600.00 [$ 46,446,000 remaining cost / 10 years]

2

Equipment Purchased

$           2,300,000.00

$        115,000.00 [ ($ 2,300,000 cost / 10 years ) x (6 months/12months)] *because purchased on 1 Jul

Total

$        48,746,000.00

$    3,622,000.00

$    4,759,600.00 [ 4,644,600 + 115,000]

Date

Accounts title

Debit

Credit

Dec-31

Depreciation expenses

$        551,600.00

Accumulated Depreciation - Building

$        551,600.00

Dec-31

Depreciation expenses

$    4,759,600.00

Accumulated Depreciation - Equipment

$    4,759,600.00

LAND
		Cost
1	Original Land	$           3,670,000.00
	Sold	$            (392,000.00)
	Remaining	$           3,278,000.00
2	Land Purchased	$           2,040,000.00
	Total	$           5,318,000.00