Question

Problem 10-05A a-c (Video) At December 31, 2020, Sheffield Company reported the following as plant assets. Land $ 4,110,000 Buildings $28,650,000 Less: Accumulated depreciation—buildings 13,680,000 14,970,000 Equipment 47,920,000 Less: Accumulated depreciation—equipment 4,730,000 43,190,000     Total plant assets $62,270,000 During 2021, the following selected cash transactions occurred. April 1 Purchased land for $2,150,000. May 1 Sold equipment that cost $870,000 when purchased on January 1, 2017. The equipment was sold for $522,000. June 1 Sold land purchased on June 1, 2011 for $1,420,000. The land cost $399,000. July 1 Purchased equipment for $2,530,000. Dec. 31 Retired equipment that cost $511,000 when purchased on December 31, 2011. The company received no proceeds related to salvage.

Record adjusting entries for depreciation for 2021. (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.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 1May 1June 1July 1Dec. 31
	(To record building depreciation)
Apr. 1May 1June 1July 1Dec. 31
	(To record equipment deprecition)

Answer 1

Since useful life of assets is not given, i have taken 10 years as life for equipment and 50 years for building, i have also provided depreciation of building taking 40 years life as an alternative

Date	Account Titles	Debit	Credit
Apr-01	Land	$       21,50,000
	Cash		$         21,50,000
May-01	Depreciation Expense-Equipment	$            29,000
	Accumulated Depreciation-Equipment		$               29,000
	Cash	$         5,22,000
	Accumulated Depreciation-Equipment	$         3,77,000
	Equipment		$           8,70,000
	Gain on Sale of Equipment		$               29,000
Jun-01	Cash	$       14,20,000
	Land		$           3,99,000
	Gain on Sale of Land		$         10,21,000
Jul-01	Equipment	$       25,30,000
	Cash		$         25,30,000
Dec-31	Depreciation Expense-Equipment	$            51,100
	Accumulated Depreciation-Equipment		$               51,100
	Accumulated Depreciation-Equipment	$         5,11,000
	Equipment		$           5,11,000
Date	Account Titles	Debit	Credit
Dec-31	Depreciation Expense-Building	$         5,73,000		=28650000/50
	Accumulated Depreciation-Building		$           5,73,000
Dec-31	Depreciation Expense-Equipment	$       47,80,400		=(47920000-870000-511000)/10+2530000/10*6/12
	Accumulated Depreciation-Equipment		$         47,80,400

Alternative

Date	Account Titles	Debit	Credit
Dec-31	Depreciation Expense-Building	$         7,16,250		=28650000/40
	Accumulated Depreciation-Building		$           7,16,250