Tucker, Inc., has the following plant asset accounts: Land, Buildings, and Equipment, with a separate accumulated depreciation account for each of these except Land. Tucker completed the following transactions:
Jan ...... 3 ...... Traded in equipment with accumulated depreciation of $61,000 (cost of
$131,000) for similar new equipment with a cash cost of $177,000. Received a trade-in allowance of $76,000 on the old equipment and paid $101,000 in cash.
Jun ...... 30 ....... Sold a building that had a cost of $640,000 and had accumulated depreciation of $150,000 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 $240,000. Tucker received $125,000 cash and a $360,000 note receivable.
Oct ..... 31 ........ Purchased land and a building for a single price of $350,000 cash. An independent appraisal valued the land at $127,400 and the building at $236,600.
Dec ..... 31 ....... Recorded depreciation as follows:
Equipment has an expected useful life of eight years and an estimated residual value of 12% 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 20% of its cost.
Reuirement
Recored the transaction in Tucker, Inc.'s journal.