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    Journalization of Asset Transactions for the Jimenez Co.

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    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 Purchase equipment for $2,000,000.
    Dec 31 Retired equipment that cost $500,000 when purchased on December 31, 1999. No salvage value was received.

    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 and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement. (List multiple debit/credit entries in descending order of amount.)

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    Solution Summary

    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 Purchase equipment for $2,000,000.
    Dec 31 Retired equipment that cost $500,000 when purchased on December 31, 1999. No salvage value was received.

    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 and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement. (List multiple debit/credit entries in descending order of amount.)

    $2.19

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