Greco Lake Resort reported the following on its at December 31, 2018:
Property, plant, and equipment, at cost:
Land………………………………………………………. $142,000
Buildings ………………………………………………… 705,000
Less: Accumulated depreciation ……………. (342,000)
Equipment………………………………………………. 403,000
Less: Accumulated depreciation …………… (269,000)
On July 1, 2019, the resort expanded operations and purchased additional equipment for cash at a cost of $109,000. The company depreciates buildings using the straight-line method over 20 years with residual values of $86,000. Due to expected obsolescence, the equipment has a useful life of only 10 years and is being depreciated using the double-declining-balance method with a residual value of zero.
Requirements
1. Journalize Greco Lake Resort’s plant asset purchase and depreciation transactions for 2019.
2. Report plant assets on the December 31, 2019, balance sheet.
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