Question

10. Proceeds for salvage UI Instructions Analyze the transactions using the table column headings provided here ber of each transaction in the Item column, and enter the amounts in the columns. For amounts in the Other Accounts column, also indicate the Land Item Buildings Other Accounts ere. Enter the num is in the appropriate ate the account thes P9-2B At December 31, 2011, Craig Corporation reported these plant assets. Land $4,000,000 Buildings $28,800,000 Less: Accumulated depreciation-buildings 11,520,000 17,280,000 Equipment 48,000,000 Less: Accumulated depreciation equipment 5,000,000 43,000,000 Total plant assets $64,280,000 During 2012, the following selected cash transactions occurred. Apr. Purchased land for $2,600,000. May 1 Sold equipment that cost $750,000 when purchased on January 1, 2007 The equipment was sold for $367,000. June 1 Sold land purchased on June 1, 2000, for $1,800,000. The land cost $800,000. Sept. 1 Purchased equipment for $840,000. Dec. 31 Retired fully depreciated equipment that cost $470,000 when purchase on December 31, 2002. No salvage value was received.

Please help p9-2b

Answer 1

ANSWER:

PART-1)

Date	Particulars	Debit	Credit
Apr-01	Land	2,600,000
	Cash		2,600,000
May-01	Depreciation expense	25,000
	Accumulated Depreciation expense		25,000
May-01	Cash	367,000
	Accumulated Depreciation	400,000
	Equipment		750,000
	Gain on disposal		17,000
	Working:
	Cost equipment	750,000
	Accumulated Depreciation (750000/10)*5 +25000	400,000
	Book value	350,000
	Proceeds from sale	367,000
	Gain on disposal	17,000
Jun-01	Cash	1,800,000
	Gain on disposal		1,000,000
	Land		800,000
Sep-01	Equipment	840,000
	Cash		840,000

Part-2)

Date	Particulars	Debit	Credit
Dec-31	Accumulated Depreciation	470,000
	Equipment		470,000
Dec-31	Depreciation expense (28,800,000*1/40)	720,000
	Accumulated Depreciation		720,000
Dec-31	Depreciation expense	4,706,000
	Accumulated Depreciation		4,706,000

Part-3)

	4,706,000
Partial Balance sheet
ASSETS:
Plant assets:
Land	5,800,000
Building	28,800,000
Equipment	47,620,000
Accumulated depreciation	21,148,000
Total plant assets		61,072,000