At December 31, 2017, Grand Company reported the following as plant assets. Land $4,000,000 Buildings $28,500,000 Less:
Question:
At December 31, 2017, Grand Company reported the following as plant assets.
Land | $ 4,000,000 | |
Buildings | $28,500,000 | |
Less: Accumulated depreciation—buildings | 12,100,000 | 16,400,000 |
Equipment | 48,000,000 | |
Less: Accumulated depreciation—equipment | 5,000,000 | 43,000,000 |
Total plant assets | $63,400,000 |
During 2018, the following selected cash transactions occurred.
April 1 | Purchased land for $2,130,000. |
May 1 | Sold equipment that cost $750,000 when purchased on January 1, 2014. The equipment was sold for $450,000. |
June 1 | Sold land purchased on June 1, 2008 for $1,500,000. The land cost $400,000. |
July 1 | Purchased equipment for $2,500,000. |
Dec. 31 | Retired equipment that cost $500,000 when purchased on December 31, 2008. The company received no proceeds related to salvage. |
Instructions
(a)
Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement.
(b)
Record adjusting entries for depreciation for 2018.
Depreciation Expense—Buildings $570,000; Equipment $4,800,000
(c)
Prepare the plant assets section of Grand's balance sheet at December 31, 2018.
Total plant assets $61,760,000
Accounting Principles
ISBN: 978-1118875056
12th edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso