Question

Regal Freight-way provides freight service. The company’s balance sheet includes Land, Buildings, and Motor-Carrier Equipment. Regal Freight-way uses a separate accumulated depreciation account for each depreciable asset. During 2014, Regal Freight-way completed the following transactions:
Jan 1 Traded in motor-carrier equipment with accumulated depreciation of $90,000 (cost of $130,000) for new equipment with a cash cost of $176,000. Regal Freight way received a trade-in allowance of $70,000 on the old equipment and paid the remainder in cash.
Jul 1 sold a building that cost $550,000 and had accumulated depreciation of $250,000 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 $50,000. Regal Freight-way received $100,000 cash and a $600,000 note receivable.
Oct 31 purchased land and a building for a cash payment of $300,000. An independent appraisal valued the land at $115,000 and the building at $230,000.
Dec 31 Recorded depreciation as follows:
New motor-carrier equipment has an expected useful life of 1 million kilometers and an estimated residual value of $26,000. Depreciation method is the units-of-production method. During the year, Regal Freight-way drove the truck 150,000 kilometers.
Depreciation on buildings is straight-line. The new building has a 40-year useful life and a residual value equal to $20,000.
Requirement
Record the transactions in Regal Freightway’s journal.


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  • CreatedJuly 08, 2015
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