Question: Galaxy Inc has the following plant asset accounts Land Buildings

Galaxy, Inc., has the following plant asset accounts: Land, Buildings, and Equipment, with a separate accumulated depreciation account for each of these except Land. Galaxy completed the following transactions:
Jan 3 Traded in equipment with accumulated depreciation of $68,000 (cost of $131,000) for similar new equipment with a cash cost of $175,000. Received a trade-in allowance of $71,000 on the old equipment and paid $104,000 in cash.
Jun 30 Sold a building that had a cost of $640,000 and had accumulated depreciation of $100,000 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 $240,000. Galaxy received $115,000 cash and a $420,000 note receivable.
Oct 31 Purchased land and a building for a single price of $320,000 cash. An independent appraisal valued the land at $70,200 and the building at $280,800.
Dec 31 Recorded depreciation as follows:
Equipment has an expected useful life of 4 years and an estimated residual value of 12% of cost. Depreciation is computed on the double-declining-balance method.
Depreciation on buildings is computed by the straight-line method. The new building carries a 40-year useful life and a residual value equal to 10% of its cost.

1. Record the transactions in Galaxy, Inc.’s journal.

View Solution:

Sale on SolutionInn
  • CreatedJuly 25, 2014
  • Files Included
Post your question