Question

At December 31, 2017, Grand Company reported the following as plant assets.

Land				$ 4,360,000
Buildings		$28,130,000
Less: Accumulated depreciation—buildings		12,490,000		15,640,000
Equipment		48,640,000
Less: Accumulated depreciation—equipment		5,290,000		43,350,000
Total plant assets				$63,350,000

During 2018, the following selected cash transactions occurred.

April 1		Purchased land for $2,050,000.
May 1		Sold equipment that cost $1,020,000 when purchased on January 1, 2014. The equipment was sold for $612,000.
June 1		Sold land purchased on June 1, 2008 for $1,560,000. The land cost $403,000.
July 1		Purchased equipment for $2,580,000.
Dec. 31		Retired equipment that cost $490,000 when purchased on December 31, 2008. No salvage value was received.

Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date Account Titles and Explanation Debit Credit Apr. 1 land 2,050,000 Cash 2,050,000 May 1 Depreciation Expense Accumulated Depreciation-Buildings (To record depreciation) May 1 (To record sale of equipment)

2.

Answer 1

a)

Date	Account Name	Debit	Credit
1-Apr	Land	$        2,050,000
	Cash		$        2,050,000
	(To Record Purchase of Land)
1-May	Depreciation Expenses	$              34,000
	Accumulated Depreciation- Equipment		$              34,000
	(To Record Depreciation)
1-May	Cash	$            612,000
	Accumulated Depreciation	$            442,000
	Gain on Disposal of Assets		$              34,000
	Equipment		$        1,020,000
	(To Record Sale of Equipment)
1-Jun	Cash	$        1,560,000
	Land		$            403,000
	Gain on Sale of Land		$        1,157,000
	(To Record Sale of Land)
1-Jul	Equipment	$        2,580,000
	Cash		$        2,580,000
	(To Recotrd Equipmnet Purchase)
31-Dec	Depreciation Expesnes	$              49,000
	Accumulated Depreciation- Equipment		$              49,000
	(To record Depreciation on Equipment)
31-Dec	Accumulated Depreciation- Equipment	$            490,000
	Equipment		$            490,000
	(Being Equipment Retired)

Workings:

Cost of Equipment Sold	$        1,020,000
Useful Life	10 Year
Depreciation per Year	$            102,000
Partial Year Depreciation (102000/12*4)	$              34,000

Cost of Equipment Retired	$            490,000
Useful Life	10 Year
Depreciation per Year	$              49,000

b)

Date	Account Name	Debit	Credit
31-Dec	Depreciation Expesnes	$            562,600
	Accumulated Depreciation- Buildings		$            562,600
	(To Record Depreciation)
31-Dec	Depreciation Expesnes	$        4,842,000
	Accumulated Depreciation- Equipment		$        4,842,000
	(To Record Depreciation)

Workings:

Cost of Building	$      28,130,000
Useful Life	50 Year
Depreciation per Year	$            562,600

Beginning Cost of Equipment	$      48,640,000
Cost of Equipment Sold	$      (1,020,000)
Cost of Equipment Retired	$         (490,000)
Subtotal	$      47,130,000
Useful Life	10 Year
Depreciation	$        4,713,000
Equipment Purchased	$        2,580,000
Useful Life	10 Year
Depreciation per Year	$            258,000
Partial Year Depreciation (258000/12*6)	$            129,000
Total Equipment Depreciation(4713000+129000)	$        4,842,000

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