The plant asset accounting records of Reston Company reflected the following at the beginning of the current
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Question:
The plant asset accounting records of Reston Company reflected the following at the beginning of the current year.
| Plant building (residual value, $30,000; estimated useful life, 20 years) | $150,000 |
| Accumulated depreciation, plant building | 90,000 |
| Equipment (residual value, $35,000; estimated useful life, 10 years) | 180,000 |
| Accumulated depreciation, equipment | 90,000 |
During the current year ending December 31, the following transactions (summarized) relating to the above accounts were completed.
1. Expenditures for nonrecurring, relatively large repairs that tend to increase economic utility but not the economic lives of assets follow.
| Plant building | $45,000 |
| Equipment | 15,000 |
| Replacement of original electrical wiring system of plant building | |
| (original cost, $18,000, 75% depreciated) | 29,000 |
2. Additions follow.
| Plant building—added small wing to plant building to accommodate new equipment acquired; wing has useful life of 18 years and no residual value | $54,000 |
| Equipment—added special protection devices to 10 machines; devices are attached to the machines and have to be replaced every five years (no residual value) | 10,000 |
3. Outlays for maintenance, parts, and labor to keep assets in normal working condition follow.
| Quarter | Plant Building | Equipment |
|---|---|---|
| 1 | $1,600 | $1,900 |
| 2 | 1,800 | 6,100 |
| 3 | 1,600 | 1,000 |
| 4 | 2,000 | 10,000 |
Prepare the necessary journal entries to record transactions 1, 2, and 3.
- Note: List multiple debits or credits (when applicable) in alphabetical order
Expert Answer:
Reston Company Net Balances of plant building and Equipment at the beginning of the year are Plant B... View the full answer
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