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Sheridan Tool Supply Company purchased land and a building on April 1, 2022, for $362,400. The company paid $105,600 in cash and signed a 5% note payable for the balance. At that time, it was estimated that the land was worth $141,000 and the building, $221,400. The building was estimated to have a 25-year useful life with a $33,000 residual value. The company has a December 31 year end, prepares adjusting entries annually, and uses the straight-line method for buildings; depreciation is calculated to the nearest month. The following are related transactions and adjustments during the next three years. 2022 Dec. 31 2023 Recorded annual depreciation. 31 Paid the interest owing on the note payable. Feb. 17 Paid $205 to have the furnace cleaned and serviced. Dec. 31 Recorded annual depreciation. 31 Paid the interest owing on the note payable. 31 The land and building were tested for impairment. The land had a recoverable amount of $112,400 and the building, $23 2024 Jan. 31 Sold the land and building for $302,000 cash: $106,000 for the land and $196,000 for the building. Feb. 1 Paid the note payable and interest owing. partiall Assume instead that the company sold the land and building on October 31, 2024, for $382,000 cash: $151,000 for the land and $231,000 for the building. Prepare the journal entries to record the sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to O decimal places, e.g. 5,275.) Date Account Titles Oct. 31 Depreciation Expense Accumulated Depreciation - Building (To record depreciation expense.) Oct. 31 Cash Debit 19468 382000 Accumulated Depreciation - Building 19468 Gain on Disposal Land Building (To record disposal.) Credit 19468 67668 112400 221400

Sheridan Tool Supply Company purchased land and a building on April 1, 2022, for $362,400. The company paid $105,600 in cash and signed a 5% note payable for the balance. At that time, it was estimated that the land was worth $141,000 and the building, $221,400. The building was estimated to have a 25-year useful life with a $33,000 residual value. The company has a December 31 year end, prepares adjusting entries annually, and uses the straight-line method for buildings; depreciation is calculated to the nearest month. The following are related transactions and adjustments during the next three years. 2022 Dec. 31 2023 Recorded annual depreciation. 31 Paid the interest owing on the note payable. Feb. 17 Paid $205 to have the furnace cleaned and serviced. Dec. 31 Recorded annual depreciation. 31 Paid the interest owing on the note payable. 31 The land and building were tested for impairment. The land had a recoverable amount of $112,400 and the building, $23 2024 Jan. 31 Sold the land and building for $302,000 cash: $106,000 for the land and $196,000 for the building. Feb. 1 Paid the note payable and interest owing. partiall Assume instead that the company sold the land and building on October 31, 2024, for $382,000 cash: $151,000 for the land and $231,000 for the building. Prepare the journal entries to record the sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to O decimal places, e.g. 5,275.) Date Account Titles Oct. 31 Depreciation Expense Accumulated Depreciation - Building (To record depreciation expense.) Oct. 31 Cash Debit 19468 382000 Accumulated Depreciation - Building 19468 Gain on Disposal Land Building (To record disposal.) Credit 19468 67668 112400 221400

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 13P
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Sheridan Tool Supply Company purchased land and a building on April 1, 2022, for $362,400. The company paid $105,600 in cash and signed a 5% note payable for the balance. At that time, it was estimated that the land was worth $141,000 and the building, $221,400. The building was estimated to have a 25-year useful life with a $33,000 residual value. The company has a December 31 year end, prepares adjusting entries annually, and uses the straight-line method for buildings; depreciation is calculated to the nearest month. The following are related transactions and adjustments during the next three years. 2022 Dec. 31 2023 Recorded annual depreciation. 31 Paid the interest owing on the note payable. Feb. 17 Paid $205 to have the furnace cleaned and serviced. Dec. 31 Recorded annual depreciation. 31 Paid the interest owing on the note payable. 31 The land and building were tested for impairment. The land had a recoverable amount of $112,400 and the building, $23 2024 Jan. 31 Sold the land and building for $302,000 cash: $106,000 for the land and $196,000 for the building. Feb. 1 Paid the note payable and interest owing.
Transcribed Image Text:Sheridan Tool Supply Company purchased land and a building on April 1, 2022, for $362,400. The company paid $105,600 in cash and signed a 5% note payable for the balance. At that time, it was estimated that the land was worth $141,000 and the building, $221,400. The building was estimated to have a 25-year useful life with a $33,000 residual value. The company has a December 31 year end, prepares adjusting entries annually, and uses the straight-line method for buildings; depreciation is calculated to the nearest month. The following are related transactions and adjustments during the next three years. 2022 Dec. 31 2023 Recorded annual depreciation. 31 Paid the interest owing on the note payable. Feb. 17 Paid $205 to have the furnace cleaned and serviced. Dec. 31 Recorded annual depreciation. 31 Paid the interest owing on the note payable. 31 The land and building were tested for impairment. The land had a recoverable amount of $112,400 and the building, $23 2024 Jan. 31 Sold the land and building for $302,000 cash: $106,000 for the land and $196,000 for the building. Feb. 1 Paid the note payable and interest owing.
partiall Assume instead that the company sold the land and building on October 31, 2024, for $382,000 cash: $151,000 for the land and $231,000 for the building. Prepare the journal entries to record the sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to O decimal places, e.g. 5,275.) Date Account Titles Oct. 31 Depreciation Expense Accumulated Depreciation - Building (To record depreciation expense.) Oct. 31 Cash Debit 19468 382000 Accumulated Depreciation - Building 19468 Gain on Disposal Land Building (To record disposal.) Credit 19468 67668 112400 221400
Transcribed Image Text:partiall Assume instead that the company sold the land and building on October 31, 2024, for $382,000 cash: $151,000 for the land and $231,000 for the building. Prepare the journal entries to record the sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to O decimal places, e.g. 5,275.) Date Account Titles Oct. 31 Depreciation Expense Accumulated Depreciation - Building (To record depreciation expense.) Oct. 31 Cash Debit 19468 382000 Accumulated Depreciation - Building 19468 Gain on Disposal Land Building (To record disposal.) Credit 19468 67668 112400 221400
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