Gretta Chung Associates surveys American eating habits. The companys accounts include Land, Buildings, Office Equipment, and Communication
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 $2,000 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.
Horngrens Financial and Managerial Accounting
ISBN: 978-0133255584
4th Edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura