On July 1, 2017, Carla Vista Company received $990,000 cash as compensation for the forced sale (condemnation) of the company's land and building. The state planned to use the property to build a new on-ramp for a nearby highway. The land and building cost $450,000 and $765,000, respectively, when they were acquired. At July 1, 2017, the accumulated depreciation relating to the building amounted to $337,500. On December 1, 2017, Carla Vista purchased a piece of replacement property for cash. The new land cost $324,000, and the new building cost $963,000. Prepare the journal entries to record the transactions on July 1 and December 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 December 1

On July 1, 2017, Carla Vista Company received $990,000 cash as compensation for the forced sale (condemnation) of the company's land and building. The state planned to use the property to build a new on-ramp for a nearby highway. The land and building cost $450,000 and $765,000, respectively, when they were acquired. At July 1, 2017, the accumulated depreciation relating to the building amounted to $337,500. On December 1, 2017, Carla Vista purchased a piece of replacement property for cash. The new land cost $324,000, and the new building cost $963,000. Prepare the journal entries to record the transactions on July 1 and December 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 December 1

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Mega Ltd acquired a three-story building for use as an office on 1 January 2016 at $2 million. The…

A: Carrying amount on 31 December 2016 = Cost - Depreciation = $2,000,000 - [($2,000,000-$200,000)/20…

Q: March 1, 2020, Swifty Company acquired real estate on which it planned to construct a small office…

A: Real estate broker fees and architect fees and cost incurred to put in driveways and parking lot…

Q: Cape Horn Company purchased a building on March 1, 1988, at a cost of $4,186,000. For financial…

A: Step 1: Calculate the Accumulated DepreciationThe building was purchased on March 1, 1988, and sold…

Q: On April 1, 2025, Skysong Company received a condemnation award of $481,600 cash as compensation for…

A: Journal Entry is the primary step in recording the transactions in the books of accounts.The…

Q: On July 1, 2017, Sandhill Company received $1,012,000 cash as compensation for the forced sale…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: On January 1, 2017, Salina Company purchased land and a building for $2,240,000. At the time of the…

A: The expense incurred should be capitalised, of it would provide benefits for the long period.

Q: On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a…

A: Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income…

Q: HMI Building Ltd. (HBL) purchased a piece of vacant land on March 1, 2020, for $345,000, and…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: On January 1, 2015, MARS Inc. acquired a real property consisting of a land with a building for…

Q: Tiger Ltd purchased a machine on 1 July 2017 at the cost of $640,000. The machine is expected to…

A: Depreciation is the reduction in the value of asset due to obsolesce, wear and tear or usage.…

Q: 1 January 2018, Sharp Limited (Sharp) applied for a government grant of $20 million to finance the…

A: (a) With reference to HKAS 20, Sharp should recognize the government grant on 1 July 2018, when the…

Q: Calculate the equipment total cost at acquisition. The equipment was sold on December 31, 2023 for…

A: According to IAS 16 ( Property, Plant and Equipment ) any items of fixed asset can be capitalized if…

Q: At the beginning of 2017, Carla Vista Company acquired a mine for $ 891,000. Of this amount, $…

A: Cost of mine = Total purchase price - Land value + Development costs + restoration costs =…

Q: On May 1st, 2015, Nancy Silva paid $870,000 for a commercial building. She later sold the building…

A: The GDS method of depreciation stands for General Depreciation System. It is one of the most…

Question

100%

On July 1, 2017, Carla Vista Company received $990,000 cash as compensation for the forced sale (condemnation) of the company's
land and building. The state planned to use the property to build a new on-ramp for a nearby highway. The land and building cost
$450,000 and $765,000, respectively, when they were acquired. At July 1, 2017, the accumulated depreciation relating to the building
amounted to $337,500. On December 1, 2017, Carla Vista purchased a piece of replacement property for cash. The new land cost
$324,000, and the new building cost $963,000.
Prepare the journal entries to record the transactions on July 1 and December 1, 2017. (Credit account titles are automatically indented
when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
July 1
December 1

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

INTRODUCTION

VIEW

ANSWER

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Please solve this problem
On June 1, 2015, Skylark Enterprises (not a corporation) acquired a retailstore building for $500,000 (with $100,000 being allocated to the land). Thestore building was 39-year real property, and the straight-line cost recovery methodwas used. The property was sold on June 21, 2019, for $385,000.a. Compute the cost recovery and adjusted basis for the building using Exhibit 8.8from Chapter 8.b. What are the amount and nature of Skylark’s gain or loss from disposition ofthe property? What amount, if any, of the gain is unrecaptured § 1250 gain?
5
On January 2, 2017, Snug Clothing Consignments purchased showroom fixtures for $19,000 cash, expecting the fixtures to remain in service for five years. Snug has depreciated the fixtures on a double-declining-balance basis, with zero residual value. On October 31, 2018, Snug sold the fixtures for $8,200 cash. Record both depreciation expense for 2018 and sale of the fixtures on October 31, 2018. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. Note that 2017 depreciation was recorded and posted in 2017.) Begin by recording the depreciation expense for January 1, 2018 through October 31, 2018. Date Oct. 31 Accounts and Explanation Debit Credit
On July 15, 2018, Cottonwood Industries sold a patent and equipment to Roquemore Corporation for $750,000and $325,000, respectively. The book value of the patent and equipment on the date of sale were $120,000 and$400,000 (cost of $550,000 less accumulated depreciation of $150,000), respectively. Prepare the journal entriesto record the sales of the patent and equipment.
Jaguar Ltd purchased a machine on 1 July 2016 at the cost of $640,000. The machine is expected to have a useful life of 5 years (straight-line basis) and no residual value. For taxation purposes, the ATO allows the company to depreciate the asset over 4 years.The profit before tax for the company for the year ending 30 June 2017 is $600,000. To calculate this profit the company has deducted $60,000 entertainment expense, and $80,000 salary expense that has not yet been paid. Also the company has included $70,000 interest as income that the company has not yet received. The tax rate is 30%.Required: (c) Prepare the necessary journal entries on 30 June 2017. (3 marks)