Reference no: EM131715415

Question - Fixed Asset Transactions and Reporting

A partial portion of the balance sheet at December 31, 2012, for the Gusto Corporation is presented below:

The following transactions occurred during 2013:

• On January 1, retired equipment with anet book valueof $2,000. The equipment was purchased for $8,000. No value was received from the retirement.
• On January 1, Gusto sold a building with an original 30-yearuseful lifeand no estimatedsalvage valuefor $90,000 cash. The building was originally purchased on December 31, 2002 for $120,000.
• Purchased land for $90,000 on April 30.
• On July 1, Gusto purchased equipment for $30,000 by signing a long-term note payable.
• Prepareddepreciationentries on December 31.Depreciation expensefor the year was $40,000 for buildings and $4,500 for equipment.

Required:

a. Prepare journal entries to record all of the above transactions. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".

b. Prepare the property and equipment portion of Gusto's balance sheet at December 31, 2013.