Question
In: Accounting
Record property, plant, and equipment transactions P6-53B Schmaltz Cable Company’s balance sheet reports the following assets...
Record property, plant, and equipment transactions
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P6-53B Schmaltz Cable Company’s balance sheet reports the following assets under Property, Plant, and Equipment: Land, Buildings, Office Furniture, Communication Equipment, and Televideo Equipment. The company has a separate accumulated depreciation account for each of these assets except land. Assume that Schmaltz Cable completed the following transactions:
2017 Jan. 4 Sold communication equipment with accumulated depreciation of $85,000 (cost of $96,000) for $18,000. Purchased new equipment for $118,000. June 30 Sold a building that had cost $495,000 and had accumulated depreciation of $255,000 through December 31 of the preceding year. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $95,000. The company received $50,000 cash and a $250,000 note receivable. Nov. 4 Purchased used communication and televideo equipment from Rogers Cable Company. Total cost was $80,000 paid in cash. An independent appraisal valued the communication equipment at $75,000 and the televideo equipment at $25,000. Dec. 31 Depreciation is recorded as follows: Equipment is depreciated by the double-diminishing-balance method over a five-year life with zero residual value. Depreciation is recorded separately on the equipment purchased on January 4 and on November 4.
Requirement
-
Record the transactions in Schmaltz Cable’s journal.
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How does management choose which depreciation method to use?
Solutions
Expert Solution
There are many method by which an Asset can be depreciated over its useful life. The Law does not recommend any particular method, it is wholly management choice to choose whatever method they like.
Only difference it create is Depreciation amount in earlier year and following year.
Under SLM the depreciation amount is same in all years.But on other hand under double-diminishing-balance method the depreciation amount is higher in earlier year and less in following years
Do reach us in comment section for any clarification.
ekkarill92 answered 2 years agoRelated Solutions
Domino Inc. has the following plant, property, and equipment assets on its balance sheet for 2021...
Domino Inc. has the following plant, property, and equipment
assets on its balance sheet for 2021 and 2020:
($ thousands)
2021
2020
Land
$ 4,200
$ 4,000
Buildings
10,400
9,800
Machinery and equipment
6,500
6,800
21,100
20,600
Less Accumulated depreciation
1,200
1,000
Total
$ 19,900
$ 19,600
Determine what percent of the company’s depreciable assets are
depreciated at the end of 2020 and 2021.
The property, plant, and equipment section of the Jasper Company’s December 31, 2020, balance sheet contained...
The property, plant,
and equipment section of the Jasper Company’s December 31, 2020,
balance sheet contained the following:
Property, plant, and equipment:
Land
$
111,000
Building
$
496,000
Less:
Accumulated depreciation
(155,000
)
341,000
Equipment
138,450
Less:
Accumulated depreciation
?
?
Total property,
plant, and equipment
?
The land and building were purchased at the beginning of 2016.
Straight-line depreciation is used and a residual value of $31,000
for the building is anticipated.
The equipment is comprised of the following...
The property, plant, and equipment section of the Jasper Company’s December 31, 2020, balance sheet contained...
The property, plant, and equipment section of the Jasper
Company’s December 31, 2020, balance sheet contained the
following:
Property, plant, and equipment:
Land
$
111,000
Building
$
496,000
Less: Accumulated depreciation
(155,000
)
341,000
Equipment
138,450
Less: Accumulated depreciation
?
?
Total property, plant, and equipment
?
The land and building were purchased at the beginning of 2016.
Straight-line depreciation is used and a residual value of $31,000
for the building is anticipated.
The equipment is comprised of the following...
The property, plant, and equipment section of the Jasper Company’s December 31, 2020, balance sheet contained...
The property, plant, and equipment section of the Jasper
Company’s December 31, 2020, balance sheet contained the
following:
Property, plant, and equipment:
Land
$
111,000
Building
$
496,000
Less: Accumulated depreciation
(155,000
)
341,000
Equipment
138,450
Less: Accumulated depreciation
?
?
Total property, plant, and equipment
?
The land and building were purchased at the beginning of 2016.
Straight-line depreciation is used and a residual value of $31,000
for the building is anticipated.
The equipment is comprised of the following...
The property, plant, and equipment section of the Jasper Company’s December 31, 2017, balance sheet contained...
The property, plant, and equipment section of the Jasper
Company’s December 31, 2017, balance sheet contained the
following:
Property, plant, and
equipment:
Land
$
122,000
Building
$
1,092,000
Less: Accumulated
depreciation
(210,000
)
882,000
Equipment
178,600
Less: Accumulated
depreciation
?
?
Total property, plant, and
equipment
?
The land and building were purchased at the beginning of 2013.
Straight-line depreciation is used and a residual value of $42,000
for the building is anticipated.
The equipment is comprised of the following...
The property, plant, and equipment section of the Jasper Company’s December 31, 2017, balance sheet contained...
The property, plant, and equipment section of the Jasper
Company’s December 31, 2017, balance sheet contained the
following:
Property, plant, and
equipment:
Land
$
120,000
Building
$
840,000
Less: Accumulated
depreciation
(200,000
)
640,000
Equipment
180,000
Less: Accumulated
depreciation
?
?
Total property, plant, and
equipment
?
The land and building were purchased at the beginning of 2013.
Straight-line depreciation is used and a residual value of $40,000
for the building is anticipated.
The equipment is comprised of the following...
The property, plant, and equipment section of the Jasper Company’s December 31, 2017, balance sheet contained...
The property, plant, and equipment section of the Jasper
Company’s December 31, 2017, balance sheet contained the
following:
Property, plant, and
equipment:
Land
$
130,000
Building
$
800,000
Less: Accumulated
depreciation
(250,000
)
550,000
Equipment
186,900
Less: Accumulated
depreciation
?
?
Total property, plant, and
equipment
?
The land and building were purchased at the beginning of 2013.
Straight-line depreciation is used and a residual value of $50,000
for the building is anticipated.
The equipment is comprised of the following...
Assume that Inter-Provincial Transport Ltd.’s balance sheet includes the following assets under Property, Plant, and Equipment:...
Assume that Inter-Provincial Transport Ltd.’s balance sheet
includes the following assets under Property, Plant, and Equipment:
Land, Buildings, and Motor-Carrier Equipment. Inter-Provincial has
a separate accumulated depreciation account for each of these
assets except land. Further, assume that Inter-Provincial completed
the following transactions in 2019:
Jan. 3 Sold motor-carrier equipment with accumulated
depreciation of $67,000 (cost of $130,000) for $71,000 cash.
Purchased similar new equipment with a cash price of $176,000.
July 2 Sold a building that had cost $650,000...
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...
What is the total amount of property, plant, and equipment that will appear on the Balance Sheet?
These are selected account balances on December 31, 2017: Land (location of the corporation’s office building) $400,000, Land held for investment $600,000, Office Building $2,900,000, Inventory $800,000, Equipment $1,800,000, Office Furniture $400,000, Accumulated Depreciation $1,200,000. What is the total amount of property, plant, and equipment that will appear on the Balance Sheet?
$5,700,000
$6,900,000
$4,300,000
$4,900,000
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