At December 31, 2020, Kisses Corporation reported the following plant assets: Land Buildings Less: Accumulated Depreciation Buildings Equipment Less: Accumulated Depreciation Equipment Total Plant Assets During 2021, the following transactions occurred: . April 1, purchased land for $2,630,000. . • $3,000,000 $28,500,000 12,100,000 16,400,000 48,000,000 5,000,000 43,000,000 $62.400.000 May 1, sold equipment that cost $750,000 when it was purchased on January 1", 2017. The equipment was sold for $370,000. June 1, sold land purchased on June 1, 2010 for $1,800,000. The land cost $800,000 July 1st, Purchased equipment for $800,000 December 31st, Retired fully depreciated equipment that cost $470,000 when purchased on January 1, 2012. No salvage value was received Additional Information: . • • • The company uses straight line depreciation. The buildings are estimated to have a 40 year life and no salvage value The equipment is estimated to have a 10 year life and no salvage value Depreciation is updated at the time of sale or retirement. Required: a. b. C. Journalize the above transactions Record adjusting entries for 2021 depreciation Prepare the plant assets section of the company's balance sheet as at December 31, 2021.
At December 31, 2020, Kisses Corporation reported the following plant assets: Land Buildings Less: Accumulated Depreciation Buildings Equipment Less: Accumulated Depreciation Equipment Total Plant Assets During 2021, the following transactions occurred: . April 1, purchased land for $2,630,000. . • $3,000,000 $28,500,000 12,100,000 16,400,000 48,000,000 5,000,000 43,000,000 $62.400.000 May 1, sold equipment that cost $750,000 when it was purchased on January 1", 2017. The equipment was sold for $370,000. June 1, sold land purchased on June 1, 2010 for $1,800,000. The land cost $800,000 July 1st, Purchased equipment for $800,000 December 31st, Retired fully depreciated equipment that cost $470,000 when purchased on January 1, 2012. No salvage value was received Additional Information: . • • • The company uses straight line depreciation. The buildings are estimated to have a 40 year life and no salvage value The equipment is estimated to have a 10 year life and no salvage value Depreciation is updated at the time of sale or retirement. Required: a. b. C. Journalize the above transactions Record adjusting entries for 2021 depreciation Prepare the plant assets section of the company's balance sheet as at December 31, 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:At December 31, 2020, Kisses Corporation reported the following plant assets:
Land
Buildings
Less: Accumulated Depreciation Buildings
Equipment
Less: Accumulated Depreciation Equipment
Total Plant Assets
During 2021, the following transactions occurred:
$3,000,000
$28,500,000
12,100,000
16,400,000
48,000,000
5,000,000
43,000,000
$62.400.000
•
.
April 1, purchased land for $2,630,000.
May 1, sold equipment that cost $750,000 when it was purchased on January 1", 2017.
The equipment was sold for $370,000.
June 1, sold land purchased on June 1, 2010 for $1,800,000. The land cost $800,000
July 1st, Purchased equipment for $800,000
December 31st, Retired fully depreciated equipment that cost $470,000 when purchased
on January 1, 2012. No salvage value was received
Additional Information:
•
The company uses straight line depreciation.
The buildings are estimated to have a 40 year life and no salvage value
The equipment is estimated to have a 10 year life and no salvage value
Depreciation is updated at the time of sale or retirement.
Required:
a.
b.
C.
Journalize the above transactions
Record adjusting entries for 2021 depreciation
Prepare the plant assets section of the company's balance sheet as at December 31,
2021.
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