Prepare Volkswagen’s journal entry to record €2,430 in disposals assuming it receives €720 cash in return and the accumulated depreciation on the disposed assets totals €1,195. Prepare Volkswagen’s journal entry to record additions assuming they are paid in cash and are treated as “betterments (improvements)” to the assets. Prepare Volkswagen’s journal entry to record depreciation. Impairments to property, plant, and equipment. 2,430ĭepreciation on property, plant, and equipment. 11,560ĭisposals of property, plant, and equipment. €46,169Īdditions to property, plant, and equipment. Volkswagen Group reported the following information for property, plant, and equipment, along with additions, disposals, depreciation, and impairments, for a recent year-end (euros in millions). Prepare Stewart’s year-end adjusting entries required on December 31, 2017, to (a) amortize the $40,000 cost of the sublease, (b) amortize the office improvements, and (c) record rent expense. Prepare entries for Stewart to record (a) its payment to Mason for the right to sublease the building space, (b) its payment of the 2017 annual rent to the building owner, and (c) its payment for the office improvements. The improvements are paid for by Stewart on January 3, 2017, and are estimated to have a useful life equal to the 13 years remaining in the life of the building. After taking possession of the leased space, Stewart pays for improving the office portion of the leased space at a $20,000 cost. for the remaining five years of the lease-Stewart pays $40,000 to Mason for the right to sublease and agrees to assume the obligation to pay the $36,000 annual rent to the building owner beginning January 1, 2017. On January 1, 2017, Mason decides to sublease the space to Stewart Co. 
The lease contract requires (1) annual (prepaid) rental payments of $36,000 each January 1 throughout the life of the lease and (2) for the lessee to pay for all additions and improvements to the leased property. entered into a 12-year lease on a building.
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