At January 1, 2024, Hamsmith Corporation, a public company, reported the following property, plant, and equipment accounts 

Hamsmith uses straight-line depreciation for buildings and equipment and its fiscal year end is December 31. The buildings are estimated to have a 50-year useful life and no residual value; the equipment is estimated to have a 10-year useful life and no residual value. The notes mature on the anniversary date of the issue. Interest on all notes is payable or collectible on the maturity date. During 2024, the following selected transactions occurred: 

Apr. 1 Purchased land for $2.2 million. Paid $550,000 cash and issued a three-year, 6% note for the balance. 

May 1 Sold equipment for $150,000 cash. The equipment cost $1.4 million when originally purchased on January 1, 2016. 

June 1 Sold land for $1.8 million. Received $450,000 cash and accepted a three-year, 5% note for the balance. The land cost $700,000. 

July 1 Purchased equipment for $1.1 million cash. 

Dec. 31 Retired equipment that cost $500,000 when purchased on December 31, 2017. 

Instructions 

a. Record the above transactions. 

b. Record any adjusting entries required at December 31, 2024. 

c. Prepare the property, plant, and equipment section of Hamsmith’s balance sheet at December 31, 2024.

Transcribed Image Text:

Accumulated depreciation-buildings Accumulated depreciation-equipment Buildings Equipment Land $31,100,000 27,000,000 48,700,000 75,000,000 10,000,000