. (Learning Objectives 1, 3, 4: Measure and account for the cost of plant assets anddepreciation; analyze and record a plant asset disposal) Blair, Inc., has the following plantasset accounts: Land, Buildings, and Equipment, with a separate accumulated depreciationaccount for each of these except Land. Blair completed the following transactions:Jan 3 Traded in equipment with accumulated depreciation of $63,000 (cost of$130,000) for similar new equipment with a cash cost of $171,000. Receiveda trade-in allowance of $71,000 on the old equipment and paid $100,000in cash.Jun 30 Sold a building that had a cost of $635,000 and had accumulated depreciationof $170,000 through December 31 of the preceding year. Depreciationis computed on a straight-line basis. The building has a 40-year useful lifeand a residual value of $295,000. Blair received $135,000 cash and a$325,750 note receivable.Oct 31 Purchased land and a building for a single price of $340,000 cash. An independent appraisal valued the land at $108,900 and the building at $254,100.Dec 31 Recorded depreciation as follows:Equipment has an expected useful life of five years and an estimated residualvalue of 5% of cost. Depreciation is computed using the double-declining-balancemethod.Depreciation on buildings is computed using the straight-line method. Thenew building carries a 40-year useful life and a residual value equal to 10%of its cost.Requirement1. Record the transactions in Blair’s journal
. (Learning Objectives 1, 3, 4: Measure and account for the cost of plant assets and
asset accounts: Land, Buildings, and Equipment, with a separate
account for each of these except Land. Blair completed the following transactions:
Jan 3 Traded in equipment with accumulated depreciation of $63,000 (cost of
$130,000) for similar new equipment with a cash cost of $171,000. Received
a trade-in allowance of $71,000 on the old equipment and paid $100,000
in cash.
Jun 30 Sold a building that had a cost of $635,000 and had accumulated depreciation
of $170,000 through December 31 of the preceding year. Depreciation
is computed on a straight-line basis. The building has a 40-year useful life
and a residual value of $295,000. Blair received $135,000 cash and a
$325,750 note receivable.
Oct 31 Purchased land and a building for a single price of $340,000 cash. An independent appraisal valued the land at $108,900 and the building at $254,100.
Dec 31 Recorded depreciation as follows:
Equipment has an expected useful life of five years and an estimated residual
value of 5% of cost. Depreciation is computed using the double-declining-balance
method.
Depreciation on buildings is computed using the straight-line method. The
new building carries a 40-year useful life and a residual value equal to 10%
of its cost.
Requirement
1. Record the transactions in Blair’s journal
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