Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 53

Disposal of Plant Assets
During the current year, Blake Construction disposed of plant assets in the following transactions:
Jan. Equipment costing $18,000 was given to a scrap dealer at no charge.t the date of disposal, accumulated depreciation on the office equipment amounted to $16,800.
Mar. Blake sold land and a building for $800,000, receiving $100,000 cash and a five-year, 12 percent note receivable for the remaining balance.lake's records showed the following amounts: Land, $50,000; Buildings, $680,000; Accumulated Depreciation: Building (at the date of disposal), $250,000.
Jul.0 Blake traded in an old truck for a new one.he old truck had cost $26,000, and its accumulated depreciation amounted to$22,000.The list price of the new truck was $37,000, but Blake received a $12,000 trade-in allowance for the old truck and paid only $25,000 in cash.lake includes trucks in its Vehicles account.
Sept. Blake traded in its old computer system as part of the purchase of a new system.he old system had cost $12,000, and its accumulated depreciation amounted to $9,000.he new computer's list price was $10,000.lake accepted a trade-in allowance of $400 for the old computer system, paying $1,000 down.in cash and issuing a one-year, 10 percent note payable for the$8,600 balance owed.
Instructions
a.Prepare journal entries to record each of the disposal transactions.ssume that depreciation expense on each asset has been recorded up to the date of disposal.hus you need not update the accumulated depreciation figures stated in the problem.
bWill the gains and losses recorded in part a above affect the gross profit reported in Blake's income statement Explain.
c.Explain how the financial reporting of gains and losses on plant assets differs from the financial reporting of unrealized gains and losses on marketable securities discussed in Chapter 7.