Date | Account Titles and Explanation | Debit | Credit |
Apr. 1 | Land | 4830000 | |
Cash | 1010000 | ||
Mortgage payable | 3820000 | ||
May 1 | Depreciation expense ($2699400/10 x 4/12) | 89980 | |
Accumulated depreciation-equipment | 89980 | ||
(To record depreciation expense) | |||
May 1 | Cash | 300000 | |
Accumulated depreciation-equipment* | 2249500 | ||
Loss on disposal | 149900 | ||
Equipment | 2699400 | ||
(To record loss/gain on sale of equipment) | |||
June 1 | Cash | 831800 | |
Notes receivable ($3525800 - $831800) | 2694000 | ||
Land | 1300000 | ||
Gain on disposal | 2225800 | ||
(To record loss/gain on sale of land) | |||
July 1 | Equipment | 2300000 | |
Cash | 2300000 | ||
Dec. 31 | Accumulated depreciation-equipment | 1100000 | |
Equipment | 1100000 | ||
(To record the retirement of equipment) | |||
Dec. 31 | Impairment loss | 4830000 | |
Land | 4830000 |
*Accumulated depreciation-equipment:
Annual depreciation = $2699400/10 = $269940
Depreciation from Jan. 1, 2010 to Dec. 31, 2017 = 8 x $269940 = $2159520
Depreciation from Jan. 1, 2018 to May 1, 2018 = $269940 x 4/12 = $89980
Total accumulated depreciation = $2159520 + $89980 = $2249500
Date | Account Titles and Explanation | Debit | Credit |
Dec. 31 | Depreciation expense ($89700000/40) | 2242500 | |
Accumulated depreciation-buildings | 2242500 | ||
(To record depreciation expense on buildings) | |||
Dec. 31 | Depreciation expense* | 15995060 | |
Accumulated depreciation-equipment | 15995060 | ||
(To record depreciation expense on equipment) | |||
Dec. 31 | Interest expense ($3820000 x 6% x 9/12) | 171900 | |
Interest payable | 171900 | ||
(To record interest expense) | |||
Dec. 31 | Interest receivable | 78575 | |
Interest revenue ($2694000 x 5% x 7/12) | 78575 | ||
(To record interest revenue) |
*Depreciation expense:
Depreciation on Jan. 1 balance: ($162600000 - $2699400 - $1100000)/10 = $15880060
Depreciation on new equipment purchased: ($2300000/10 x 6/12) = $115000
Total depreciation expense = $15880060 + $115000 = $15995060
CRANE LIMITED | ||
Statement of Financial Position (Partial) | ||
December 31, 2018 | ||
Assets | ||
Property, Plant, and Equipment | ||
Land | 18100000 | |
Buildings | 89700000 | |
Less: Accumulated depreciation-Buildings | 65042500 | 24657500 |
Equipment | 161100600 | |
Less: Accumulated depreciation-Equipment | 65335540 | 95765060 |
Total property, plant, and equipment | 138522560 |
Question 2 At January 1, 2018, Crane Limited reported the following property, plant, and equipment accounts:...
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