Question

At January 1, 2022, Blossom Company reported the following property Accumulated depreciation-buildings Accumulated depreciation equipment Buildings Equipment Land $60,200,000 52.000.000 97,200.000 150,000,000 20,000,000 The company uses straight-line depreciation for buildings and equipment, its year and is December 31, and makes adjusting entries life and no salvage value; the equipment is estimated to have a 10-year useful life and no salvage value . The buildings are estimated During 2022, the following selected transactions occurred: Apr May 1 Dunel Purchased land for $4.00 millon. Paid 51.000 million cash and issued a 3-vea 6% note payable for the balance Interest on the note is payable annually each Abril Sold equipment for $200,000 cash The equipment cost $2.40 million when orginally purchased on January 1, 2014 Sold land for $3.60 million Received $600,000 cash and accepted a year, 5% note for the balance The land cost $1. 20 million when purchased on June 1, 2016. Interest on the note is due annually each june 1 Purchased equipment for $2.00 million cash Retired equipment that costs on when purchased on December 31, 2012. No proceeds were received July 1 Dec 31 your answer is partially correct. Try again Journalize the above transactions. (Credit account titles are automatically indented when the amount is entered the account tities and enter for the amounts.) Date Account Tities and Explanation April I may los a w ERU TOP A return

For the first part I have to journalize the above transactions. Then I have to record and adjusting entry for the depreciation required at December 31. Then for the third part I have to prepare the property plant and equipment for the company statement of financial position.

Answer 1

Date	Account titles and explanation						Debit	Credit
Apr 1.	Land						4000000
	Cash							1000000
	Note payable							3000000
	(Purchased Land)
May 1.	Depreciation expense			(Note:1)			80000
	Accumulated depreciation-Equipment							80000
	(Depreciation recorded prior to sale)
May 1.	Cash						200000
	Accumulated depreciation-equipment (Note:1)						2000000
	Loss on sale of equipment			(Balancing figure)			200000
	Equipment							2400000
	(Disposal of equipment)
June 1.	Cash						600000
	Note receivable				(3600000-600000)		3000000
	Land							1200000
	Gain on sale of Land		(Balancing figure)					2400000
	(Sale of Land)
July 1.	Equipment						2000000
	Cash							2000000
	(Purchased equipment)
Dec 31.	Depreciation expense			(Note:2)			100000
	Accumulated depreciation-Equipment							100000
	(Depreciation recorded prior to retirement)
Dec 31.	Accumulated depreciation-equipment						1000000
	Equipment							1000000
	(Retired equipment and no proceeds were received)
Note:1- Accumulated depreciation of equipment sold:
Original cost=$ 2400000
Acquired on Jan 1,2014
Useful life=10 years
Depreciation per year=(Original cost-Salvage value)/Useful life=(2400000-0)/10=$ 240000
Depreciation will be same from 2014 till disposal since straight line method is used
Depreciation from 2014 to 2021=240000*8=$ 1920000
Depreciation for 2022
From Jan 1 to May 1 (For 4 months)=240000*(4/12)=$ 80000
Accumulated depreciation=1920000+80000=$ 2000000
Note:2- Accumulated depreciation of equipment retired:
Original cost=$ 1000000
Acquired on Dec 31,2012
Useful life=10 years
Depreciation per year=(Original cost-Salvage value)/Useful life=(1000000-0)/10=$ 100000
Depreciation will be same from 2013 till disposal since straight line method is used
Depreciation from 2013 to 2021=100000*9=$ 900000
Depreciation for 2022=$ 100000
Accumulated depreciation=900000+100000=$ 1000000
Adjusting entry:
Date	Account titles and explanation				Debit	Credit
Dec 31.	Depreciation expense				2430000
	Accumulated depreciation-Building					2430000
	(Note:3)
	(Depreciation recorded for building)
	Depreciation expense				14760000
	Accumulated depreciation-Equipment					14760000
	(Note:4)
	(Depreciation recorded for equipment)
Note:3
Original cost=$ 97200000
Useful life=40 years
Depreciation per year=(Original cost-Salvage value)/Useful life=(97200000-0)/40=$ 2430000