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

Morey, Inc., has the following plant asset accounts: Land, Buildings, and Equipment, with a separate accumulated depreciation account for each of these except Land. Morey completed the following transactions:
Jan 4 Traded in equipment with accumulated depreciation of $64,000 (cost of $134,000) for similar new equipment with a cash cost of $175,000. Received a trade-in allowance of $72,000 on the old equipment and paid $103,000 in cash.
Jun 29 Sold a building that had a cost of $650,000 and had accumulated depreciation of $140,000 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 $220,000. Morey received $125,000 cash and a $379,625 note receivable.
Oct 30 Purchased land and a building for a single price of $360,000 cash. An independent appraisal valued the land at $160,800 and the building at $241,200.
Dec 31 Recorded depreciation as follows:
Equipment has an expected useful life of 8 years and an estimated residual value of 3% 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 30% of its cost.

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

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  • CreatedJuly 25, 2014
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