Answered: Please answer all the parts of the…

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

Concept explainers

Topic Video

Question

Please answer all the parts of the below question:

At December 31, 2017, Sheffield Corporation reported the following plant assets.

Land		$ 3,798,000
Buildings	$26,660,000
Less: Accumulated depreciation—buildings	15,097,050	11,562,950
Equipment	50,640,000
Less: Accumulated depreciation—equipment	6,330,000	44,310,000
Total plant assets		$59,670,950

During 2018, the following selected cash transactions occurred.

Apr.	1	Purchased land for $2,785,200.
May	1	Sold equipment that cost $759,600 when purchased on January 1, 2011. The equipment was sold for $215,220.
June	1	Sold land for $2,025,600. The land cost $1,266,000.
July	1	Purchased equipment for $1,392,600.
Dec.	31	Retired equipment that cost $886,200 when purchased on December 31, 2008. No salvage value was received.

Prepare a tabular summary that includes the plant asset accounts and balances shown on the December 31, 2017, balance sheet. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)

Assets

Liabilities

Stockholders' Equity

Retained Earnings

Cash

Land

Buildings

Accum. Depr. - Bldgs.

Equipment

Accum. Depr. - Equip.

Common Stock

Revenue

Expense

Dividend

Bal.

Enter the 2018 transactions in the tabular summary from part (a). Sheffield 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. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)

Assets

Liabilities

Stockholders' Equity

Retained Earnings

Cash

Land

Buildings

Accum. Depr. - Bldgs.

Equipment

Accum. Depr. - Equip.

Common Stock

Revenue

Expense

Dividend

Bal.

Apr. 1

May 1

Loss on disposalResearch & development expenseAmortization expenseGain on disposalDepreciation expense

May 1

Loss on disposalResearch & development expenseGain on disposalAmortization expenseDepreciation expense

June 1

Loss on disposalResearch & development expenseDepreciation expenseAmortization expenseGain on disposal

July 1

Dec. 31

Research & development expenseAmortization expenseGain on disposalDepreciation expenseLoss on disposal

Dec. 31

Record adjustments to accounts for depreciation for 2018. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)

Assets

Liabilities

Stockholders' Equity

Retained Earnings

Cash

Land

Buildings

Accum. Depr. - Bldgs.

Equipment

Accum. Depr. - Equip.

Common Stock

Revenue

Expense

Dividend

Bal.

Apr. 1

May 1

Depreciation expenseGain on disposalLoss on disposalAmortization expenseResearch & development expense

May 1

Amortization expenseLoss on disposalDepreciation expenseGain on disposalResearch & development expense

June 1

Research & development expenseDepreciation expenseGain on disposalLoss on disposalAmortization expense

July 1

Dec. 31

Amortization expenseResearch & development expenseDepreciation expenseLoss on disposalGain on disposal

Dec. 31

Gain on disposalResearch & development expenseDepreciation expenseAmortization expenseLoss on disposal

Dec. 31

Gain on disposalDepreciation expenseResearch & development expenseLoss on disposalAmortization expense

Prepare the plant assets section of Sheffield’s balance sheet at December 31, 2018.

Expert Solution

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

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