Question

Problem 9-5A (Part Level Submission) At December 31, 2015, Grand Company reported the following as plant assets. Land Buildings Less: Accumulated depreciation buildings Equipment Less: Accumulated depreciation equipment $4,286,000 $29,198,000 11,765,000 17,433,000 48,207,000 5,405,000 42,802,000 $64,521,000 Total plant assets During 2016, the following selected cash transactions occurred April 1 Purchased land for $2,128,000 May 1 Sold equipment that cost $1,161,000 when purchased on January 1, 2012. The equipment was sold for $696,600. June 1 Sold land purchased on June 1, 2006 for $1,452,000. The land cost $406,000 July 1 Purchased equipment for $2,491,000 Dec. 31 Retired equipment that cost $480,000 when purchased on December 31, 2006. No salvage value was received.

Answer 1

sol ution: Account title Date 1 Land 2,128,000 Cash 2,128,000 Ma 1Depreciation Expense 38,700 Accumulated Depreciation-Equipment (1161000*1/10)*4/12 To record depreciation) 38,700 1 Cash Ma 696,000 503,100 Accumulated Depreciation-Equipment Equipment Gain on Disposal (refer working 1) (to record sale of equipmen 1,161,000 38,100 1 Cash June 1,452,000 Land 406,000 1,046,000 Gain on Disposal Jul 1Equipment Cash 2,491,000 2,491,000 31 Depreciation Expense-Accumulated Depreciation Dec 48,000 ??Equipment 480000* 1/10 (To record depreciation) 48,000 31 |Accumulated Depreciation-Equipment 480,000 Equipment refer working 2) (To record retire ment of equipment) 480,000

working 1 Cost Accumulated Depreciation-Equipment (1161000* 4/10)+38700 Book value Cash proceeds Gain on disposal 1,161,000 503,100 657,900 696,000 38,100 working 2: Cost Accumulated Depreciation-Equipment (480000*1/10) 10 480,000 480,000 Book value 0