Question

Becord proper plant and equipment ransactions, prepare partial balance heet. P 9.4A (LO 1, 2, 3, 5), AP At January 1, 2022. Youngstown Company reported the following property plant, and equipment accounts: Accumulated depreciation-buildings $ 62,200,000 Accumulated depreciation-equipment 54,000,000 Buildings 97,400,000 Equipment 150,000,000 Land 20,000,000 The company uses straight-line depreciation for buildings and equipment, its year-end is December 31. and it makes adjusting entries annually. 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. During 2022, the following selected transactions occurred: Apr. 1 Purchased land for $4.4 million. Paid S1.1 million cash and issued a 3-year, 6 note payable for the balance. Interest on the note is payable annually each April 1. May 1 Sold equipment for $300,000 cash. The equipment cost $2.8 million when originally purchased on January 1, 2014. June 1 Sold land for $3.6 million. Received $900,000 cash and accepted a 3-year, 56 note for the balance. The land cost $1.4 million when purchased on June 1, 2016. Interest on the note is due annually each June 1. July 1 Purchased equipment for $2.2 million cash. Dec 31 Retired equipment that cost $1 million when purchased on December 31, 2012. No proceeds were received.

Answer 1

ANSWER :-

(a)

Date	Account titles and explanation	Debit	Credit
Apr 1.	Land	4,400,000
	Cash		1,100,000
	Notes payable		3,300,000
May 1	Depreciation expense	93,333
	Accumulated depreciation-equipment		93,333
May 1.	Cash	300,000
	Accumulated depreciation-equipment	2,333,333
	Loss on sale of plant and equipment	166,667
	Equipment		2,800,000
June 1.	Cash	900000
	Note receivable	2,700,000
	Land		1,400,000
	Gain on sale of Land		2,200,000
July 1.	Equipment	2,200,000
	Cash		2,200,000
Dec 31	Depreciation expense	100,000
	Accumulated depreciation		100,000
Dec 31.	Accumulated depreciation-equipment	1,000,000
	Equipment		1,000,000

(b)

Dec 31	Depreciation expense	2,435,000
	Accumulated depreciation- Buildings		2,435,000
	(To record depreciation on buildings)
Dec 31	Depreciation expense
.	Accumulated depreciation-equipment	14,730,000
	(To record depreciation on buildings)		14,730,000
Dec 31	Interest expense	148,500
	interest payable		148,500
Dec 31	interest receivable	78750
	interest revenue		78750

(c)

statement of financial position ending Dec 2020
Property,Plant and equipment:	$	$
Land		23,000,000
Buildings	97,400,000
Less: Accumulated depreciation - buildings	64,635,000	32,765,000
Equipment	148,400,000
Less: Accumulated depreciation- equipment	65,590,000	82,810,000
Total Property,Plant and equipment		138,575,000

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