Question: Graham Freightway provides freight service The company s balance sheet includes

Graham Freightway provides freight service. The company’s balance sheet includes Land, Buildings, and Motor-Carrier Equipment. Graham Freightway uses a separate accumulated depreciation account for each depreciable asset. During 2012, Graham Freightway completed the following transactions:
Jan 1 Traded in motor-carrier equipment with accumulated depreciation of $92,000 (cost of $131,000) for new equipment with a cash cost of $173,000. Graham Freightway received a trade-in allowance of $63,000 on the old equipment and paid the remainder in cash.
Jan 1 Sold a building that cost $580,000 and had accumulated depreciation of $280,000 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 $40,000. Graham Freightway received $90,000 cash and a $590,000 note receivable.
Oct 31 Purchased land and a building for a cash payment of $600,000. An independent appraisal valued the land at $234,600 and the building at $455,400.
Dec 31 Recorded depreciation as follows:
New motor-carrier equipment has an expected useful life of 1 million miles and anestimated residual value of $23,000. Depreciation method is theunits-of-production method. During the year, Graham Freightway drove the truck 160,000 miles.
Depreciation on buildings is straight-line. The new building has a 40-year useful life and a residual value equal to $40,000.

1. Record the transactions in Graham Freightway’s journal.

Sale on SolutionInn
  • CreatedApril 29, 2014
  • Files Included
Post your question