Chapter 11, Problem 11.6P

Disposals of Long-Term Operating Assets—Analysis, Depreciation, and Journal Information related to the long-term operating assets of Rivera Retail Distributors, Inc. at December 31,2018, is as follows:

Balance Sheet Category	Cost	Accumulated Depreciation Through 12/31/2018	Estimated Useful Life (Years)	Estimated Residual Value	Depreciation Method
Equipment	$ 500,000	$ 180,000	10	$ 50,000	Double-declining balance
Machinery	345,500	170,000	8	5,500	Straight line
Vehicles	127,900	75,000	5	2,900	Straight line
Leasehold Improvements	65,400	21,800	3	0	Straight line
Building	12,000,000	3,252,000	20	1,500,000	Straight line
Land	4,560,000	N/A	N/A	N/A	N/A

The fiscal year-end of the company is December 31. The following events occurred during 2019:

1. 1. On February 1, Rivera sold the vehicles to Wholesale Produce, Inc. for $15,000
2. 2. On March 31, all of Rivera’s equipment and machinery was destroyed by a fire in one of its facilities.
3. 3. On May 1, the equipment was replaced at a cost of $625,000, and the machinery cost the company $420,000 to replace. The estimated useful lives and residual values remained the same as specified for the original machinery and equipment. The company paid cash

Required

1. a. Prepare the journal entries required to record each of those events and to record depreciation expense at the end of the year.
2. b. Determine the ending net book value of Rivera’s long-term operating assets on its December 31, 2019, balance sheet. Show the balance for each asset individually and in total.