Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 9, Problem 9.38BP
Recording lump-sum asset purchases, depreciation, and disposals
Granny Carney Associates surveys American eating habits. The company's accounts include Land, Buildings, Office Equipment, and Communication Equipment, with a separate
| Jan. 1 | Purchased office equipment, $112,000. Paid $78,000 cash and financed the remaining with a note payable. |
| Apr. 1 | Acquired land and communication equipment in a lump-sum purchase. Total cost was $41 0,000 paid in cash. An independent appraisal valued the land at $322,875 and the communication equipment at $107,625. |
| Sep. 1 | Sold a building that cost $540,000 (accumulated depreciation of $240,000 through December 31 of the preceding year). Granny Carney received $360,000 cash from the sale of the building. Depreciation is computed on a straight-line basis. The building has a 40-year useful life and a residual value of $60,000. |
| Dec. 31 | Recorded depreciation as follows: Communication equipment is Office equipment is depreciated using the double-declining-balance method over five years with a $5,000 residual value. |
Record the transactions in the journal of Granny Carney Associates.
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Chapter 9 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
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