Reference no: EM133424682
Question: You are the accountant for Plants from Paradise Ltd. (Plants), a garden center located in Victoria, BC. Plants has a December 31 fiscal year end. The controller has given you a list of accounting tasks to complete:
Prepare the Property, Plant, and Equipment entries (Task #1)
Prepare a contingent liability analysis (Task #2)
Prepare a payroll entry (Task #3)
Prepare Financial Statements (Task #4)
Prepare a ratio analysis (Task #5)
Task #1 - Prepare the Property, Plant, and Equipment Journal Entries (15 Marks):
It is now December 31, 2022 - using the template provided, prepare the journal entries for the following PP&E transactions that took place during the year. Please show your calculations and round to the nearest dollar:
A new greenhouse was purchased on June 1, 2022 for $20,000 cash. The greenhouse is expected to have a useful life of 15 years and a salvage value of $2,500 at the end of its life. Plants considers the greenhouse a building for accounting purposes. Record the purchase and the annual depreciation.
A new tractor was purchased on November 1, 2022 for $12,500 cash. The tractor is expected to last 5 years and will be scrapped at the end of its useful life (no salvage value). Record the purchase and the annual depreciation.
On February 1, 2022, Plants sold their old tractor for $12,000 cash. At December 31, 2021, the Tractor had an original cost of $24,000 and Accumulated Depreciation of $9,000. The tractor is depreciated on a straight-line basis, at a rate of $3,000 per year. Record the disposal of the tractor.
Plants has existing equipment that is depreciated at a rate of $5,000 per year and existing buildings that are depreciated at a rate of $10,000 per year. Record the annual depreciation expense.