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journalize the above transactions torrealba uses straight line depreciation for buil 617371

At December 31, 2014, Torrealba Company reported the following as plant assets.

Land

$ 2,000,000

Buildings

$20,000,000

Less: Accumulated depreciation—buildings

8,000,000

12,000,000

Equipment

30,000,000

Less: Accumulated depreciation—equipment

4,000,000

26,000,000

Total plant assets

$40,000,000

During 2015, the following selected cash transactions occurred.

April 1

Purchased land for $1,200,000.

May 1

Sold equipment that cost $450,000 when purchased on January 1, 2011. The equipment was sold for $260,000.

June 1

Sold land purchased on June 1, 2005, for $1,000,000. The land cost $340,000.

July 1

Purchased equipment for $1,500,000.

Dec. 31

Retired equipment that cost $300,000 when purchased on December 31, 2005. No salvage value was received.

Instructions

(a)Journalize the above transactions. Torrealba uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year useful life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement.

(b)Record adjusting entries for depreciation for 2015.

(c)Prepare the plant assets section of Torrealba”s balance sheet at December 31, 2015.

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