CHAPTER 9 HOMEWORK PREVIOUS NEXT Problem 3:P9-32A Background: Assignment ille Jo
ID: 2509045 • Letter: C
Question
CHAPTER 9 HOMEWORK PREVIOUS NEXT Problem 3:P9-32A Background: Assignment ille Johnson Associates surveys Amerikcan eating habits The company's 1) using the Gemeral Journal tab, dick Add Transaction te ccounts include Land, Buildings, Office Equipment, with a depreciable asset n the Transactions section below during 201 Ccatojornaline each transaction. Click Rost Transacion ence you complete ohnson Associates completed the activities lsted the entry, then repeat these steps for each transaction. 2) Click the Reports tab and review the resuts of recording these transactions on the General Ledger Click Submit Work when complete Transactionss 01/01/2018 Purchased office equipment, $113,000. Paid $80,000 cash and fnanced the remainder with a note pryable $310.000, paid teach. An rdependent appraisal valued the land $244,125 and the communication equipment at $81,375 09/01/2018 Sold a building that cost $520,000 December 31 of the $420,000 cash From the sale of the building. Depreciaion is year). Ellhe Johnson The building bas a REPORTS anuary 1,2018-December 31, 2018Explanation / Answer
Journal entries
date
explanation
debit
credit
1-Jan
office equipment
113000
cash
80000
notes payable
33000
1-Apr
land
232500
Fair value
proportion of total value
allocation of purchase price = proportion*purchase price
communication equipment
77500
land
244125
0.75
232500
cash
310000
communication equipment
81375
0.25
77500
total fair value
325500
310000
31-Aug
depreciation expense
8250
accumulated depreciation
8250
annual depreciation on building
(520000-25000)/40
12375
Depreciation for the year - 2018 for 9 months on building
(12375/12)*8
8250
1-Sep
cash
420000
balance in accumulated depreciation on building
285000+8250
293250
accumulated depreciation
293250
cost of building
520000
building
520000
less accumulated depreciation
293250
gain on sale of building
193250
Book value at the time of sale
226750
selling price of building
420000
31-Dec
depreciation expense-communication equipment
15500
gain on sale of building
420000-226750
193250
accumulated depreciation-communication equipment
15500
31-Dec
depreciation expense-office equipment
45200
cost of office equipment
113000
accumulated depreciation-office equipment
45200
life of equipment
5
scrap value
1000
amount to be depreciated
(113000-1000)
112000
straight line rate of depreciation
1/5
20%
Dounle declining rate
20%*2
40%
Annual depreciation
113000*40%
45200
Journal entries
date
explanation
debit
credit
1-Jan
office equipment
113000
cash
80000
notes payable
33000
1-Apr
land
232500
Fair value
proportion of total value
allocation of purchase price = proportion*purchase price
communication equipment
77500
land
244125
0.75
232500
cash
310000
communication equipment
81375
0.25
77500
total fair value
325500
310000
31-Aug
depreciation expense
8250
accumulated depreciation
8250
annual depreciation on building
(520000-25000)/40
12375
Depreciation for the year - 2018 for 9 months on building
(12375/12)*8
8250
1-Sep
cash
420000
balance in accumulated depreciation on building
285000+8250
293250
accumulated depreciation
293250
cost of building
520000
building
520000
less accumulated depreciation
293250
gain on sale of building
193250
Book value at the time of sale
226750
selling price of building
420000
31-Dec
depreciation expense-communication equipment
15500
gain on sale of building
420000-226750
193250
accumulated depreciation-communication equipment
15500
31-Dec
depreciation expense-office equipment
45200
cost of office equipment
113000
accumulated depreciation-office equipment
45200
life of equipment
5
scrap value
1000
amount to be depreciated
(113000-1000)
112000
straight line rate of depreciation
1/5
20%
Dounle declining rate
20%*2
40%
Annual depreciation
113000*40%
45200