Regal Freightway provides freight service. The companys balance sheet includes Land, Buildings, and Motor-Carrier Equipment. Regal Freightway
Question:
Regal Freightway provides freight service. The company’s balance sheet includes Land, Buildings, and Motor-Carrier Equipment. Regal Freightway uses a separate accumulated depreciation account for each depreciable asset. During 2018, Regal Freightway completed the following transactions:
Jan 1 Traded in motor-carrier equipment with accumulated depreciation of $88,000 (cost of $140,000) for new equipment with a cash cost of $128,000. Regal Freightway received a trade-in allowance of $63,000 on the old equipment and paid the remainder in cash.
Jul 1 Sold a building that cost $570,000 and had accumulated depreciation of $270,000 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 Freightway received $110,000 cash and a $280,000 note receivable.
Oct 31 Purchased land and a building for a cash payment of $650,000. An independent appraisal valued the land at $235,950 and the building at $479,050.
Dec 31 Recorded depreciation as follows:
New motor-carrier equipment has an expected useful life of 500,000 miles and an estimated residual value of $18,000. Depreciation method is the units-of-production method. During the year, Regal Freightway drove the equipment 200,000 miles.
Depreciation on buildings is straight-line. The new building has a 40-year useful life and a residual value equal to $64,700.
Requirement
Record the transactions in Regal Freightway’s journal.
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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