Reference no: EM132801869
Question - Long term assets - At December 31, 2018, Samson Company reported the following as plant assets:
Land $3,000,000
Buildings $26,500,000
Less: Accumulated depreciation - buildings 12,100,000 14,400,000
Equipment 40,000,000
Less: Accumulated depreciation - equipment 5,000,000 35,000,000
Total plant assets $52,400,000
Samson Company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year useful life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value.
During the year ended December 31, 2019, the following selected transactions occurred:
April 1 Purchased land for $2,200,000 cash.
May 1 Sold equipment that cost $600,000 when purchased on December 31, 2014. The equipment was sold for $360,000 cash.
June 1 Sold land purchased on June 1, 2014 for $1,800,000 cash. The land cost $600,000.
July 1 Purchased equipment for $1,800,000 cash.
Dec. 31 Retired equipment that cost $500,000 when purchased on December 31, 2009. No salvage value was received.
On November 1, 2019, Samson Company acquired a copyright for $1,200,000. The copyright is expected to have a useful life of 10 years, with no salvage value.
Required -
(a) Prepare the journal entries for Samson Company to record the above transactions. Update depreciation on assets disposed of at the time of sale or retirement.
(b) Prepare the adjusting journal entries for depreciation on i) buildings and ii) equipment for Samson Company for the year ended December 31, 2019.
(c) Prepare the adjusting journal entry for Samson Company to record the amortization expenses for the copyright for the year ended December 31, 2019.