# P9-4A Youngstown Company – Property, Plant, and Equipment Journal Entries

## 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

### April 1st

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.

 Date Account Debit Credit 1-Apr Land 4,400,000 Cash 1,100,000 Notes Payable 3,300,000

### May 1st

Sold equipment for \$300,000 cash. The equipment cost \$2.8 million when originally purchased on January 1, 2009.

 1-May Depreciation Expense 140,000 Accumulated Depreciation 140,000 ( Depreciation = (2,800,000 / 10 years) * 0.5 years ) 1-May Cash 300,000 Accumulated Depreciation 2,380,000 Equipment 2,800,000 Gain on Disposal (120,000) ( Depreciation = (2,800,000 / 10 years) * 8.5 years )

### June 1st

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.

 1-Jun Cash 900,000 Notes Receivable 2,700,000 Land 1,400,000 Gain on Disposal 2,200,000

### July 1st

Purchased equipment for \$2.2 million cash.

 1-Jul Equipment 2,200,000 Cash 2,200,000

### December 31st

Retired equipment that cost \$1 million when purchased on December 31,2007. No proceeds were received.

 1-Jul Equipment 2,200,000 Cash 2,200,000