Question

Problem 10-5A

At December 31, 2017, Grand Company reported the following as plant assets.

Land				$ 3,560,000
Buildings		$29,090,000
Less: Accumulated depreciation—buildings		12,460,000		16,630,000
Equipment		48,930,000
Less: Accumulated depreciation—equipment		5,430,000		43,500,000
Total plant assets				$63,690,000

During 2018, the following selected cash transactions occurred.

April 1		Purchased land for $2,000,000.
May 1		Sold equipment that cost $1,170,000 when purchased on January 1, 2014. The equipment was sold for $702,000.
June 1		Sold land purchased on June 1, 2008 for $1,470,000. The land cost $410,000.
July 1		Purchased equipment for $2,470,000.
Dec. 31		Retired equipment that cost $473,000 when purchased on December 31, 2008. No salvage value was received

2)  Record adjusting entries for depreciation for 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

3)Prepare the plant assets section of Grand’s balance sheet at December 31, 2018. (List Plant Assets in order of Land, Buildings and Equipment.)

Answer 1

Date	Account title and explanaiton	Debit	Credit
Apr. 1	Land	2,000,000
	Cash		2,000,000
May 1	Depreciation Expense (1170000/10 * 4/12)	39000
	Accumulated Depreciation-Equipment		39000
May 1	Cash	702,000
	Accumulated Depreciation-Equipment	507000
	Equipment		1,170,000
	Gain on Disposal of Plant Assets		39000
June 1	Cash	1,470,000
	Gain on Disposal of Plant Assets		1060000
	land		410,000
July 1	Equipment	2,470,000
	Cash		2,470,000
Dec 31	Depreciation Expense	47300
	Accumulated depreciation - Equipment		47300
Dec 31	Accumulated depreciation - Equipment	473000
	Equipment		473000