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P10-5A At December 31, 2008, Jimenez Company reported the following as plant assets

P10-5A At December 31, 2008, Jimenez Company reported the following as plant assets
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Solution Guide / Answer Key:

ACCOUNTING

ACC 280 / XACC 280

Axia College of University of Phoenix (UoP)

Principles of Accounting

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

ACC 280 / XACC 280 Solution

Problem 10-5A (P10-5A) At December 31, 2008, Jimenez Company reported the following as plant assets.

Land $ 4,000,000
Buildings $28,500,000 Less: Accumulated depreciation—buildings 12,100,000 16,400,000 Equipment 48,000,000 Less: Accumulated depreciation—equipment 5,000,000 43,000,000 Total plant assets $63,400,000

During 2009, the following selected cash transactions occurred.
April 1 Purchased land for $2,130,000.
May 1 Sold equipment that cost $780,000 when purchased on January 1, 2005. The equipment was sold for $450,000.
June 1 Sold land purchased on June 1, 1999, for $1,500,000.The land cost $400,000.
July 1 Purchased equipment for $2,000,000.
Dec. 31 Retired equipment that cost $500,000 when purchased on December 31, 1999. No salvage value was received.

Instructions
(a) Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year 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 2009.
(c) Prepare the plant assets section of Jimenez’s balance sheet at December 31, 2009.

 

FILE: MS WORD

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