P9-4A Youngstown Company
In this tutorial, we will look at Property, Plant, and Equipment (PP&E) journal entries for Youngstown Company. This will show you how to handle journal entries and depreciation for assets throughout the course of a year.
- Student: Tyler Muffty
- Textbook: Principles of Accounting II
- Course: Accounting Week 3
P9-4A At January 1, 2017, Youngstown Company reported the following property, plant, and equipment accounts:
- Accumulated depreciation—buildings $62,200,0
- Accumulated depreciation—equipment 54,000,000
- Buildings 97,400,000
- Equipment 150,000,000
- Land 20,000,000
Purchased land for $4.4 million. Paid $1.1 million cash and issued a 3‐year, 6% note payable for the balance. Interest on the note is payable annually each April 1.
Sold equipment for $300,000 cash. The equipment cost $2.8 million when originally purchased on January 1, 2009.
|( Depreciation = (2,800,000 / 10 years) * 0.5 years )|
|Gain on Disposal||(120,000)|
|( Depreciation = (2,800,000 / 10 years) * 8.5 years )|
Sold land for $3.6 million. Received $900,000 cash and accepted a 3‐year, 5% note for the balance. The land cost $1.4 million when purchased on June 1, 2011. Interest on the note is due annually each June 1.
|Gain on Disposal||2,200,000|
Purchased equipment for $2.2 million cash.
Retired equipment that cost $1 million when purchased on December 31,2007. No proceeds were received.
|Accumulated Depreciation – Building||2,435,000|
|( Depreciation = (97,400,000 / 40 years)|
|Accumulated Depreciation – Equipment||14,720,000|
|( Depreciation = (150,000,000 / 10 years)||14,720,000|