At December 31, 2017, Grand Company reported the following as plant assets. $ 3,980,000 Land Buildings Less: Accumulated depreciation-buildings Equipment Less: Accumulated depreciation-equipment Total plant assets During 2018, the following selected cash transactions occurred. April 1 Purchased land for $2,200,000. May 1 Sold equipment that cost $840,000 when purchased on January 1, 2014. The equipment was sold for $504,000. June 1 Sold land purchased on June 1, 2008 for $1,450,000. The land cost $399,000. July 1 Purchased equipment for $2,480,000. Dec. 31 Retired equipment that cost $491,000 when purchased on December 31, 2008. The company received no proceeds related to salvage. $28,210,000 13,200,000 15,010,000 48,670,000 4,980,000 43,690,000 $62,680,000
At December 31, 2017, Grand Company reported the following as plant assets. $ 3,980,000 Land Buildings Less: Accumulated depreciation-buildings Equipment Less: Accumulated depreciation-equipment Total plant assets During 2018, the following selected cash transactions occurred. April 1 Purchased land for $2,200,000. May 1 Sold equipment that cost $840,000 when purchased on January 1, 2014. The equipment was sold for $504,000. June 1 Sold land purchased on June 1, 2008 for $1,450,000. The land cost $399,000. July 1 Purchased equipment for $2,480,000. Dec. 31 Retired equipment that cost $491,000 when purchased on December 31, 2008. The company received no proceeds related to salvage. $28,210,000 13,200,000 15,010,000 48,670,000 4,980,000 43,690,000 $62,680,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Please dont provide solution image based thanx
Transcribed Image Text:Record adjusting entries for depreciation for 2018. (Credit account titles are automatically indented when amount is entered.
Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No
Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Date
(To record building depreciation)
(To record equipment depreciation)
Debit
Credit
Transcribed Image Text:At December 31, 2017, Grand Company reported the following as plant assets.
$ 3,980,000
Land
Buildings
Less: Accumulated depreciation-buildings
$28,210,000
13,200,000 15,010,000
48,670,000
Equipment
Less: Accumulated depreciation-equipment 4,980,000 43,690,000
Total plant assets
$62,680,000
During 2018, the following selected cash transactions occurred.
April 1 Purchased land for $2,200,000.
May 1
June 1
July 1
Dec. 31
Sold equipment that cost $840,000 when purchased on January 1, 2014. The equipment was sold for $504,000.
Sold land purchased on June 1, 2008 for $1,450,000. The land cost $399,000.
Purchased equipment for $2,480,000.
Retired equipment that cost $491,000 when purchased on December 31, 2008. The company received no proceeds related to salvage.
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