Navaro Corporation reported the
following plant assets.
P9-2A At December 31, 2014, Navaro Corporation reported the following plant assets.
|
Land
|
$ 4,473,000
|
|||
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Buildings
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$30,940,000
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|||
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Less: Accumulated
depreciation—buildings
|
17,780,175
|
13,159,825
|
||
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Equipment
|
59,640,000
|
|||
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Less: Accumulated depreciation—equipment
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7,455,000
|
52,185,000
|
||
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Total plant assets
|
$69,817,825
|
During 2015, the following
selected cash transactions occurred.
|
Apr.
|
1
|
Purchased land for $3,280,200.
|
|
|
May
|
1
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Sold equipment that cost
$894,600 when purchased on January 1, 2008. The equipment was sold for
$253,470.
|
|
|
June
|
1
|
Sold land for $2,385,600. The
land cost $1,491,000.
|
|
|
July
|
1
|
Purchased equipment for
$1,640,100.
|
|
|
Dec.
|
31
|
Retired equipment that cost
$1,043,700 when purchased on December 31, 2005. No salvage value was received.
|
Journalize the transactions.
Navaro uses straight-line depreciation for buildings and equipment. The
buildings are estimated to have a 40-year useful life and no salvage
value; the equipment is estimated to have a 10-year useful life and no salvage
value. Update depreciation on assets disposed of at the time of sale or
retirement.
Record
adjusting entries for depreciation for 2015.
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Date.
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Account
Titles and Explanation
|
Debit
|
Credit
|
|
Dec. 31
|
|||
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(To record
depreciation on buildings.)
|
|||
|
31
|
|||
Prepare
the plant assets section of Navaro’s balance sheet at December 31, 2015. (Hint:
You may wish to set up T accounts, post beginning balances, and then post 2015
transactions.)
SOLUTION PREVIEW
(a) April 1 Land .......................................................................... ....... 3,280,200
Cash........................................................................................... 3,280,200
May 1 Depreciation Expense.............................................................. 29,820
File name: P9-2A Navaro Corp.doc File type: doc PRICE: $7
