Assume Interstellar Communications Ltd.’s balance sheet includes the following assets under Property, Plant, and Equipment: Land,...

Assume Interstellar Communications Ltd.’s balance sheet includes the following assets under Property,
Plant, and Equipment: Land, Buildings, and Motor-Carrier Equipment. Interstellar Communications has
a separate accumulated depreciation account for each of these assets except land. Further, assume
that Interstellar completed the following transactions:
• Jan 2: Sold motor-carrier equipment with accumulated depreciation of $67,000 (cost of
$130,000) for $70,000 cash. Purchased similar new equipment with a cash price of $176,000.
• July 3: Sold a building that had cost $650,000 and had accumulated depreciation of $145,000
through December 31 of the preceding year. Depreciation is computed on a straight-line basis.
The building had a 40-year useful life and a residual value of $250,000. Interstellar received
$100,000 cash and a $400,000 note receivable.
• Oct 29: Purchased land and a building for a single price of $420,000. An independent appraisal
valued the land at $150,000 and the building at $300,000.
• Dec 31: Recorded depreciation as follows: New motor-carrier equipment has an expected useful
life of six years and an estimated residual value of 5% of cost. Depreciation is computed on the
double-diminishing-balance method. Depreciation on buildings is computed by the straight-line
method. The new building carries a 40-year useful life and a residual value equal to 10% of its
cost.
1. Please journalize each of the transactions from Jan 2nd – Dec 31st.

Expert Solution

ekkarill92 answered 7 months ago

Question 5 Assume Interstellar Communications Ltd.’s balance sheet includes the following assets under Property, Plant, and...

Question 5 Assume Interstellar Communications Ltd.’s balance sheet includes the following assets under Property, Plant, and Equipment: Land, Buildings, and Motor-Carrier Equipment. Interstellar Communications has a separate accumulated depreciation account for each of these assets except land. Further, assume that Interstellar completed the following transactions: Jan 2: Sold motor-carrier equipment with accumulated depreciation of $67,000 (cost of $130,000) for $70,000 cash. Purchased similar new equipment with a cash price of $176,000. July 3: Sold a building that had...

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