You purchased a building, equipment and a truck for $700,000 cash. The building has an appraisal...

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Question

You purchased a building, equipment and a truck for $700,000 cash. The building has an appraisal...

You purchased a building, equipment and a truck for $700,000 cash. The building has an
appraisal value of $400,000, the equipment $300,000 and a truck appraised at $100,000
Determine the cost to be assigned to each asset and prepare the journal entry to make
the purchase.

JOURNAL ENTRY


The building has a 20 year life expectancy and a $25,000 salvage value. It will be
depreciated using the straight-line method. Assume at the end of the 8th year
the building is sold for $150,000 cash
What is the journal entry to report the sale of the building.

Journal Entry: you will probably have extra lines.


The equipment has a salvage value of $10,000, life
expectancy of 5 years. Calculate depeciation for
all years necessary using the double declining balace.
What is the book value at the beginning of year 6?

	Depreciation	Book-Value
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6

business accounting

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Answer 1

Answer #1

Journal Entries:

Date	Acc Title	Debit $	Credit $

1	Building	350000
	Equipment	262500
	Truck	87500
	Cash		700000
	(purchase of building, equipment and truck)

		Of 700000
Building	400000	350000		700000*400000/800000
Equipment	300000	262500
Truck	100000	87500
Total	800000	700000



2	Acc. Depreciation - Building	50000		(150000-25000)*8/20
	Cash	150000
	Building		150000
	Gain on sale		50000
	(sale of building recorded)




3) please provide cost price of equipment.

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Answer 2

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