Please help !! Problem 9-2A (Part Level Submission) At December 31, 2014, Navaro

Question

Please help !!

Problem 9-2A (Part Level Submission) At December 31, 2014, Navaro Corporation reported the following plant assets. Land Buildings Less: Accumulated depreciation- buildings Equipment Less: Accumulated depreciation- equipment Total plant assets $ 4,152,000 $27,880,000 16,504,200 11,375,800 55,360,000 6,920,000 48,440,000 $63,967,800 During 2015, the following selected cash transactions occurred Apr. 1 May 1 June 1 July 1 Dec. 31 Purchased land for $3,044,800 Sold equipment that cost $830,400 when purchased on January 1, 2008. The equipment was sold for $235,280 Sold land for $2,214,400. The land cost $1,384,000 Purchased equipment for $1,522,400 Retired equipment that cost $968,800 when purchased on December 31, 2005. No salvage value was received

Explanation / Answer

Answer: Journal Entry:

1 April Land A/C Dr. $3044800
    To Cash A/C $3044800

1 May

830,400 / 10 = $83040 annual depreciation
83040 x 4/12 = $27680 depreciation adjustment
Dr Depreciation Expense--Equipment 27680
Cr Accumulated Depreciation--Equipment 27680

*Accumulated depreciation is now (7 x 83040) + 27680 = $608960

Dr Cash 235280
Dr Accumulated Depreciation--Equipment 608960
Cr Equipment 830400
Cr Gain on Sale 13840

1 June

Dr Cash 2214,400
Cr Land 1,384,000
Cr Gain on Sale 830400

1 July

Dr Equipment 1,522,400
Cr Cash 1,522,400

31 Dec

968800 / 10 = $96880 annual depreciation
Dr Depreciation Expense--Equipment 96880
Cr Accumulated Depreciation--Equipment 96880
*The equipment has been fully depreciated

Dr Accumulated Depreciation--Equipment 968,800
Cr Equipment 968,800

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