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Home / Questions / At December 31 2016 Durango Ltd reported the following as plant assets Land £ 2000000 Bu...

At December 31 2016 Durango Ltd reported the following as plant assets Land £ 2000000 Buildings £28500000 Less Accumulated depreciation

At December 31, 2016, Durango Ltd. reported the following as plant assets.

Land…………………………………………………………………………..£ 2,000,000

Buildings……………………………………………………£28,500,000

Less: Accumulated depreciation-buildings…………………12,100,000……16,400,000

Equipment…………………………………………………….30,000,000

Less: Accumulated depreciation-equipment…………………4,000,000……26,000,000

Total plant assets……………………………………………………………..£44,400,000

During 2017, the following selected cash transactions occurred.

Mar. 1 Purchased land for £1,350,000.

April 1 Sold equipment that cost £420,000 when purchased on January 1, 2013. The equipment was sold for £248,000.

June 1 Sold land purchased on June 1, 2007, for £1,000,000. The land cost £310,000.

Oct. 1 Purchased equipment for £1,260,000.

Dec. 31 Retired equipment that cost £300,000 when purchased on December 31, 2007. No residual value was received.

Instructions

(a) Journalize the above transactions. Durango uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year useful life and no residual value. The equipment is estimated to have a 10-year useful life and no residual value. Update depreciation on assets disposed of at the time of sale or retirement.

(b) Record adjusting entries for depreciation for 2017.

(c) Prepare the plant assets section of Durango’s statement of financial position at December 31, 2017.

May 21 2020 View more View Less

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