Recording lump-sum asset purchases, depreciation, and disposals Whitney Plumb Associates surveys American eating habits. The company’s account; include Land, Buildings, Office Equipment, and Communication Equipment, with a separate Accumulated Depreciation

Recording lump-sum asset purchases, depreciation, and disposals Whitney Plumb Associates surveys American eating habits. The company’s account; include Land, Buildings, Office Equipment, and Communication Equipment, with a separate Accumulated Depreciation account for each asset. During 2018, Whitney Plumb completed the following transactions: Record the transactions in the journal of Whitney Plumb Associates. Transcribed Image Text: Jan. 1 Purchased office equipment, $117,000. Paid $77,000 cash and financed
the remainder with a note payable.
Apr. 1 Acquired land and communication equipment in a lump-sum
purchase. Total cost was $350,000 paid in cash. An independent
appraisal valued the land at $275,625 and the communication equipment
at $91,875.
Sep. 1 Sold a building that cost $520,000 (accumulated depreciation of $285,000
through December 31 of the preceding year). Whitney Plumb received
$390,000 cash from the sale of the building. Depreciation is computed on
a straight-line basis. The building has a 40-year useful life and a residual
value of $25,000.
Dec. 31 Recorded depreciation as follows:
Communication equipment is depreciated by the straight-line method
over a five-year life with zero residual value.
Office equipment is depreciated using the double-declining-balance
method over five years with a $2,000 residual value.