Question

During the first few days of the year, Jules Company entered into the following transactions:

1	Purchased a parcel of land with a building on it for $900,000 cash. The building, which will be used in operations, has an estimated useful life of 20 years and a salvage value of $60,000. The assessed valuations for property tax purposes show the land at $80,000 and the building at $720,000.
2	Paid $31,200 for the construction of an asphalt parking lot for customers. The parking lot is expected to last 12 years and has no salvage value.
3	Paid $50,000 for the construction of a new entrance to the building.
4	Purchased store equipment, paying the invoice price (including seven percent sales tax) of $78,760 in cash. The estimated useful life of the equipment is eight years, and the salvage value is $6,000.
5	Paid $240 freight on the new equipment.
6	Paid $1,650 to repair damages to floor caused when the store equipment was accidentally dropped as it was moved into place.
7	Paid $75 for an umbrella holder to place inside front door (customers may place wet umbrellas in the holder). The holder is expected to last 20 years.

Required
a. Prepare journal entries to record these transactions.
b. Prepare the December 31 journal entries to record depreciation expense for the year. Double-declining balance depreciation is used for the equipment, and straight-line depreciation is used for the building and parking lot.

• Transactions
• Depreciation

General Journal
Date	Description	Debit	Credit
1	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	Building	Answer	Answer
	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	To record purchase of land and building.
2	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	To record cost of parking lot.
3	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	To record cost of new building entrance.
4	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	To record purchase of store equipment.
5	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	To record freight payment on store equipment.
6	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	To record payment to repair damaged floor.
7	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	To record purchase of umbrella holder.

Part B.

• Depreciation

General Journal
Date	Description	Debit	Credit
Dec.31	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	To record depreciation on building.
Dec.31	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	To record depreciation on parking lot.
Dec.31	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	AnswerAccumulated Depreciation - BuildingAccumulated Depreciation - Land ImprovementsAccumulated Depreciation - Store EquipmentBuildingCashDepreciation Expense - BuildingDepreciation Expense - Land ImprovementsDepreciation Expense - Store EquipmentLandLand Improvements – Parking LotMiscellaneous ExpenseRepairs ExpenseStore Equipment	Answer	Answer
	To record depreciation on store equipment.

Answer 1

Debit ($) Credit ($) A 1 JOURNAL ENTRIES 2 Date Particulars 1 land (900,000/800,000*80000) Building (900,000/800,000*720,000) Cash Account 90,000 8,10,000 9,00,000 cow 31200 2 Land Improvements Cash Account 31200 50,000 3 Building Account Cash Account 50,000 10 | 11 12 13 14 15 78,760 4 Stores Equipment Cash Account 78,7601 16 240 5 Stores Equipment Cash Account 240 17 18 19 1,650 6 Repairs expense Dr. Cash Account 1,6501 20 21 22 23 7 Misc. Expense cash Account 24

Debit ($) 25 JOURNAL ENTRIES 26 Date Particulars 1 Depreciation Expense-Equipment (810000+50000)/20 | Acumulated Depreciation Equipment 29 2 Depreciation Expense-Building (78760+240)/8 Accumulated Depreciation-Building Credit ($) 43000 43000 9875 9875 2600 34 3 Depreciation Expense-Land Improvements (31200/12) Accumulated Depreciation-Land improvements 2600