Question

plant, and equipment as part of profit from operations? What Wild are the arguments in favour of recording gains and losses on disposals of property, non-operating items? as part of profit from operations? What are the arguments in favour of recording them as P9-9B At January 1, 2017, Jaina Company, a public company ment accounts: 2017, Jaina Company, a public company, reported the following property, plant, and equip Accumulated depreciation-buildings $12,100,000 Accumulated depreciation-equipment 15,000,000 Building 28,500,000 Equipment 48,000,000 Land 4,000,000 Record property, plan equipment transaction prepare partial financ statements.(LO 2, 4, Jaina uses straight-line depreciation for buildings and equipment, and its fiscal year end is December 31. The build- ings are estimated to have a 50-year life and no residual value; the equipment is estimated to have a 10-year useful life and no residual value. Interest on all notes is payable or collectible at maturity on the anniversary date of the issue. During 2017, the following selected transactions occurred: Apr.1 Purchased land for $1.9 million. Paid $475,000 cash and issued a 10-year, 6% note for the balance. May 1 Sold equipment that cost $750,000 when purchased on January 1, 2010. The equipment was sold for $350,000 cash. June 1 Sold land purchased on June 1, 1996, for $1.2 million. Received $380,000 cash and accepted a 6% note for the balance. The land cost $300,000. July 1 Purchased equipment for $1 million on account, terms n/60. Dec. 31 Retired equipment that cost $470,000 when purchased on December 31, 2010. Instructions (a) Record the above transactions. (b) Record any adjusting entries required at December 31, 2017, and update account balances. (c) Prepare the property, plant, and equipment section of Jaina's balance sheet at December 31, 2017 ht

Answer 1

a. Record the above transactions. b. Record the adjusting entries required at Dec 31,2017 . c. Preparation of property, plant and equipment section of jaina's Balance sheet at Dec 31,2017. Refer to the below images for more detailed solution with calculations.

Record the above transactions? Deatsirement @ Date particolars credit 1st April Debit $ 1900 000 land Alc To cash Alc To Notes payable Alc 947.5000 $1425000 ist may $ 25000 apreciation expense 90 Accemolated al Dr . depreciation (equipment) $25000 Wohling: calcolation of = $ 750000 Depreciation 5 104 4 months 12 months - 20000 1st May cash Ale $ 350000 Accumulated depreciation (evunment) Roooo Atc Dr To Gain on disposal 4le. To equipment Alc $ 150000 $ 750000 Worring : cost of equipment $750000 Accumulated Dep-easuipment: [($750000 = 10x7 + $25000) (5500) carrying value of earipment Less Sales value Gain on disposal of. It 1500D $ 350.00 equipment!

Dare particulars Debit credil ist June Cash Notes $380000 $820000 Ale Dr Receivable Ale Dr 9o and the To Gain on Disposal Al 300000 I 980000 # 1000000 est July Equipment Alc Dr To Accounts poyable $ 1000D 7000* 31st Dec I 47000 Depreciation expense ale or 1 4000 To accumulated Deprecation (equipment) working - Depreciation expense $ 470000 10447000 $376000 3155 Dec & 94000 Accomolated Depreciation (earupmeni) ale or loss on disposal Alc or TO exoipment Alc $ 470000 working : (4 470000 & 10) + 8 years - 4376000

e Record update the adjusting entries account balances. required at Dec 31, 2017 y Requirement Date credit Debit $576000 31st Dec $$70000 particolars Depreciation expense ale Dr To Accomolated Depreciation (Building) worlling: Dep. expense $ 28500 Doo 50 - $570000 Jost Dec $4728000 Deprecation expense ale or S4728000 To Accomolated Depreciation Ceasuipment) wortlings: $ 4678000 10 $ 4678000 $ 1000 doo - 1046 $ 4728060 S0000 (3 48000 doo - $750000 - 470000 8 46780000 31st Dec Interest expense All To Interest Dr payable $6405 worting: & 1425000 x 6 x 2 = 464125 $28700 31st Dec - Interest To Receivable Interest al or Revenue $26700 warring : $820000 *6* $ 28700

Section of Taina's propery, sheet plant at balance & equipment Dec 31, 207 : Requirement Jaina company Balance Sheet (Partial) Dec 31, 2017 particulars Amount Amount property, plant y equipment: Land [$4000000 + $ 1900000 $300000] # 5600 000 Building $28500.000 Less - Acconolated depreciation $(12670000) $15830000 [$12 100 000 + $570000) Envoipment ($48000000 + $100000 $477 80000 -$ 750000 - $470000] Less - Allomolated depreciation $(18874000) $28906000 Is 1000000 + $ 25000 + 947000 + 4728000 - $ 550000-$376000] Total property, plant hy equipment 950336000