At December 31, 2010, Rijo Corporation reported the following plantassets.
Land $5,577,000
Buildings $49,263,500
Less: Accumulated depreciation - buildings 22,493,900
26,769,600
Equipment 74,360,000
Less: Accumulated depreciation - equipment 9,295,000
65,065,000
Total plant assets $97,411,600
During 2011, the following selected cash transactionsoccurred.
Apr. 1 Purchased land for $4,089,800.
May 1 Sold equipment that cost $1,115,400 when purchased on January1, 2004. The equipment was sold for $316,030.
June 1 Sold land for $3,346,200. The land cost $1,859,000.
July 1 Purchased equipment for $2,416,700.
Dec. 31 Retired equipment that cost $929,500 when purchased onDecember 31, 2001. No salvage value was received.
Journalize the transactions. (Hint: You may wish to set up Taccounts, post beginning balances, and then post 2011transactions.) Rijo uses straight-line depreciation for buildingsand equipment. The buildings are estimated to have a 40-year lifeand no salvage value; the equipment is estimated to have a 10-yearuseful life and no salvage value. Update depreciation on assetsdisposed of at the time of sale or retirement. (List multipledebit/credit entries from largest to smallest amount, e.g. 10, 5,2.)
Land $5,577,000
Buildings $49,263,500
Less: Accumulated depreciation - buildings 22,493,900
26,769,600
Equipment 74,360,000
Less: Accumulated depreciation - equipment 9,295,000
65,065,000
Total plant assets $97,411,600
During 2011, the following selected cash transactionsoccurred.
Apr. 1 Purchased land for $4,089,800.
May 1 Sold equipment that cost $1,115,400 when purchased on January1, 2004. The equipment was sold for $316,030.
June 1 Sold land for $3,346,200. The land cost $1,859,000.
July 1 Purchased equipment for $2,416,700.
Dec. 31 Retired equipment that cost $929,500 when purchased onDecember 31, 2001. No salvage value was received.
Journalize the transactions. (Hint: You may wish to set up Taccounts, post beginning balances, and then post 2011transactions.) Rijo uses straight-line depreciation for buildingsand equipment. The buildings are estimated to have a 40-year lifeand no salvage value; the equipment is estimated to have a 10-yearuseful life and no salvage value. Update depreciation on assetsdisposed of at the time of sale or retirement. (List multipledebit/credit entries from largest to smallest amount, e.g. 10, 5,2.)
Related questions
Problem 9-2A (Part Level Submission)
At December 31, 2014, Navaro Corporation reported the followingplant assets.
| Land | $ 5,196,000 | |||
| Buildings | $30,050,000 | |||
| Less: Accumulated depreciationâbuildings | 20,654,100 | 9,395,900 | ||
| Equipment | 69,280,000 | |||
| Less: Accumulated depreciationâequipment | 8,660,000 | 60,620,000 | ||
| Total plant assets | $75,211,900 |
During 2015, the following selected cash transactions occurred.
| Apr. | 1 | Purchased land for $3,810,400. | |
| May | 1 | Sold equipment that cost $1,039,200 when purchased on January1, 2008. The equipment was sold for $294,440. | |
| June | 1 | Sold land for $2,771,200. The land cost $1,732,000. | |
| July | 1 | Purchased equipment for $1,905,200. | |
| Dec. | 31 | Retired equipment that cost $1,212,400 when purchased onDecember 31, 2005. No salvage value wasreceived. |
Prepare the plant assets section of Navaroâs balance sheet atDecember 31, 2015. (Hint: You may wish to set up Taccounts, post beginning balances, and then post 2015transactions.) (List Plant Assets in order of Land,Building and Equipment.)
China Express purchased land for $140,000. Prior to construction on the new building, the land had to be cleared of trees and brush. Construction costs incurred during the first year are listed below:
| Land clearing costs | $ 5,000 |
| Architect fees (for new building) | 30,000 |
| Legal fees for title investigation of land | 1,000 |
| Property taxes on land (for the first year) | 2,500 |
| Building construction costs | 440,000 |
Required:
Determine the amounts that should be recorded in the land and the new building accounts.
2. Diamond Autobody purchased some new equipment. The new equipment cost $90,000. The company estimates the equipment will have a residual value of $10,000. Cheetah Copy also estimates it will use the equipment for four years or about 5,000 total hours.
Required:
Prepare a depreciation schedule for three years using the following methods:
1. Straight-line.
2. Double-declining-balance.
3. Activity-based. Actual use per year was as follows:
| Year | Hours Used |
| 1 | 1,200 |
| 2 | 1,400 |
| 3 | 1,500 |
| 4 | 1,100 |
3. The Snack Stop had the following long-term asset balances as of January 1, 2015:
| Cost | Accumulated Depreciation | Book Value | ||||
| Land | $90,000 | â | $90,000 | |||
| Building | 600,000 | ($60,000) | 540,000 | |||
| Equipment | 200,000 | (72,000) | 128,000 |
All of the assets were purchased at the beginning of 2013. The building is depreciated over a 20-year service life using the straight-line method and estimating no residual value. The equipment is depreciated over a 10-year useful life using the double-declining-balance method with an estimated residual value of $10,000. Depreciation has already been calculated for the first two years.
Required:
1. For the year ended December 31, 2015, record depreciation expense for buildings and equipment. Land is not depreciated.
2. Calculate the book value for each of the four long-term assets at December 31, 2015.
