Machinery that cost $222,000 on 1 January 20X1 was sold for $94,500 on 30 June 20X6. It
Question:
Machinery that cost $222,000 on 1 January 20X1 was sold for $94,500 on 30 June 20X6. It was being depreciated over a 10-year life by the straight-line method, assuming its residual value would be $27,000.
A building that cost $2,000,000, residual value of $130,000, was being depreciated over 20 years by the straight-line method. At the beginning of 20X6, when the structure was 8 years old, an additional wing component was constructed at a cost of $725,000. The estimated life of the wing considered separately was 15 years, and its residual value was expected to be $42,500.
The accounting period ends on 31 December.
Required:
1. Give all required entries to record:
a. Sale of the equipment, including depreciation to the date of sale.
b. The addition to the building: cash was paid.
c. Depreciation on the building and its addition after the latter has been in use for one year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)
Journal Entry Worksheet:
a-1. Record the depreciation expenses (Equipment).
a-2. Record the sale of equipment.
b. Record the addition on the building.
c-1. Record the depreciation expenses (Building Wing).
c-2.Record the depreciation expenses (Building).
2. Complete the part of the balance sheet given below showing how the building and attached wing would be reported.
Intermediate Accounting Volume 1
ISBN: 9781260306743
7th Edition
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod Dick