Chapter 11, Problem 5PB

Johnson, Incorporated, had the following transactions during the year:

• Purchased a building for $5,000,000 using a mortgage for financing

• Paid $2,000 for ordinary repair on a piece of equipment

• Sold product on account to customers for $1,500,600

• Paid $20,000 cash to add a storage shed in the corner of an existing building

• Paid $360,000 in monthly salaries

• Paid $25,000 for routine maintenance on equipment

• Paid $110,000 for extraordinary repairs

• Depreciation expense recorded for the year is $15,000.

If all transactions were recorded properly, what is the amount of increase to the Property, Plant, and Equipment section of Johnson’s balance sheet resulting from this year’s transactions? What amount did Johnson report on the income statement for expenses for the year?