Question

Exercise 10-25 On April 1, 2017, Stellar Company received a condemnation award of $481,600 cash as...

Exercise 10-25 On April 1, 2017, Stellar Company received a condemnation award of $481,600 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 $67,200 and $313,600, respectively, when they were acquired. At April 1, 2017, the accumulated depreciation relating to the building amounted to $179,200. On August 1, 2017, Stellar purchased a piece of replacement property for cash. The new land cost $100,800, and the new building cost $448,000. Prepare the journal entries to record the transactions on April 1 and August 1, 2017. (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

Homework Answers

Answer #1
Date Account Titles and Explanation Debit Credit
01-Apr-17 Cash $481,600
Accumulated Depreciation -Buildings $179,200
   Land $67,200
   Buildings $313,600
   Gain on Disposal Of Plant Assets $280,000
The Entry for reciept of Condemnation Compenssation
01-Aug-17 Land $100,800
Buildings $448,000
       Cash $548,800
The entry for Purchase of Replacement Property
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