accounting-Fixed Asset Transactions and Reporting

QUESTION

Fixed Asset Transactions and ReportingA partial portion of the balance sheet atDecember 31, 2012, for the Gusto Corporation is presented below:Land$500,000Buildings$630,000Less: Accumulated depreciation250,000380,000Equipment$ 65,000Less: Accumulated depreciation22,00043,000Total property, plant, and equipment$923,000The following transactions occurred during 2013:• On January 1, retired equipment with a net book value of $2,000. The equipment was purchased for $8,000. No value was received from the retirement.• On January 1, Gusto sold a building with an original 30-year useful life and no estimated salvage value for $90,000 cash. The building was originally purchased on December 31, 2002 for $120,000.• Purchased land for $90,000 on April 30.• On July 1, Gusto purchased equipment for $30,000 by signing a long-term note payable.• Prepared depreciation entries on December 31.Depreciation expense for the year was $40,000 for buildings and $4,500 for equipment.Requireda. Prepare journal entries to record all of the above transactions.b. Prepare the property, plant, and equipment portion of Gusto’s balance sheet at December 31, 2013.

ANSWER:

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