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On April 1, 2017, Flounder Company received a condemnation award of $490,200 cash as compensation for...

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Accounting

On April 1, 2017, Flounder Company received a condemnation awardof $490,200 cash as compensation for the forced sale of thecompany’s land and building, which stood in the path of a new statehighway. The land and building cost $68,400 and $319,200,respectively, when they were acquired. At April 1, 2017, theaccumulated depreciation relating to the building amounted to$182,400. On August 1, 2017, Flounder purchased a piece ofreplacement property for cash. The new land cost $102,600, and thenew building cost $456,000.

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3.6 Ratings (304 Votes)

Date Account Title & Description Debit ($) Credit($)
Apr 1,2017 cash            4,90,000
Accumulated depreciation - building            1,82,400
         Land            68,400
         Building       3,19,200
         Gain on sale of plant assets       2,84,800
(To Record the Gain on Forced Sale of Land and Building)
Aug 1, 2017 Land              1,02,600
Building            4,56,000
                  cash       5,58,600
(To Record the Purchase of Land and Building)

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