Question

On April 1, 2020, Pharoah Company received a condemnation award of $516,000 cash as compensation for the forced sale of the company’s land and building, which stood in the path of a new state highway. The land and building cost $72,000 and $336,000, respectively, when they were acquired. At April 1, 2020, the accumulated depreciation relating to the building amounted to $192,000. On August 1, 2020, Pharoah purchased a piece of replacement property for cash. The new land cost $108,000, and the new building cost $480,000. Prepare the journal entries to record the transactions on April 1 and August 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit April 1 Aug. 1

Answer 1

Date	Particulars	Debit ($)	Credit ($)
April 1	Cash	516,000
	Accumulated Depreciation – Building	192,000
	Land		72,000
	Building		336,000
	Gain on Sale of Assets (Bal. Figure)		300,000
	(Profit on Sale of Assets along with cash as condemnation award)
August 1	Land	108,000
	Building	480,000
	Cash		588,000
	(Purchase of Replacement property for cash)