Traded in equipment with accumulated depreciation of $68,000 (cost of $132,000) for similar new equipment with a cash cost of $182,000. Received a trade-in allowance of $76,000 on the old equipment and paid $106,000 in cash. Jan 3 Jun 30 Sold a building that had a cost of $635,000 and had accumulated depreciation of $130,000 through December 31 of the preceding year. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $295,000. Tarrier received $120,000 cash and a $380,750 note receivable. Oct 31 Purchased land and a building for a single price of $340,000 cash. An independent appraisal valued the land at $108,900 and the building at $254,100. Dec 31 Recorded depreciation as follows: Equipment has an expected useful life of five years and an estimated residual value of 12% of cost. Depreciation is computed using the double-declining-balance method. Depreciation on buildings is computed using the straight-line method. The new building carries a 40-year useful life and a residual value equal to 10% of its cost.

Traded in equipment with accumulated depreciation of $68,000 (cost of $132,000) for similar new equipment with a cash cost of $182,000. Received a trade-in allowance of $76,000 on the old equipment and paid $106,000 in cash. Jan 3 Jun 30 Sold a building that had a cost of $635,000 and had accumulated depreciation of $130,000 through December 31 of the preceding year. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $295,000. Tarrier received $120,000 cash and a $380,750 note receivable. Oct 31 Purchased land and a building for a single price of $340,000 cash. An independent appraisal valued the land at $108,900 and the building at $254,100. Dec 31 Recorded depreciation as follows: Equipment has an expected useful life of five years and an estimated residual value of 12% of cost. Depreciation is computed using the double-declining-balance method. Depreciation on buildings is computed using the straight-line method. The new building carries a 40-year useful life and a residual value equal to 10% of its cost.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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