Question

Gretta Chung Associates surveys American eating habits. The company’s accounts include Land, Buildings, Office Equipment, and Communication Equipment, with a separate Accumulated Depreciation account for each asset. During 2014, Gretta Chung completed the following transactions:
Jan. 1 Purchased office equipment, $ 119,000. Paid $ 80,000 cash and financed the remaining with a note payable.
Apr. 1 Acquired land and communication equipment in a lump-sum purchase. Total cost was $ 270,000 paid in cash. An independent appraisal valued the land at $ 212,625 and the communication equipment at $ 70,875.
Sep. 1 Sold a building that cost $ 555,000 (accumulated depreciation of $ 255,000 through December 31 of the preceding year). Chung received $ 370,000 cash from the sale of the building. Depreciation is computed on a straight- line basis. The building has a 40-year useful life and a residual value of $ 75,000.
Dec. 31 Recorded depreciation as follows: Communication equipment is depreciated by the straight-line method over a five-year life with zero residual value. Office equipment is depreciated using the double- declining- balance method over five years with a $ 2,000 residual value.
Record the transactions in the journal of Gretta Chung Associates.



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  • CreatedJanuary 16, 2015
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