At December 31, 2014, Torrealba Company reported the following as plant assets. During 2015, the following selected

Question:

At December 31, 2014, Torrealba Company reported the following as plant assets.

During 2015, the following selected cash transactions occurred.
April 1 Purchased land for $1,200,000.
May 1 Sold equipment that cost $450,000 when purchased on January 1, 2011. The equipment was sold for $260,000.
June 1 Sold land purchased on June 1, 2005, for $1,000,000. The land cost $340,000.
July 1 Purchased equipment for $1,500,000.
Dec. 31 Retired equipment that cost $300,000 when purchased on December 31, 2005.
No salvage value was received.

Instructions
(a) Journalize the above transactions. Torrealba uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year useful 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 2015.
(c) Prepare the plant assets section of Torrealbaâ€™s balance sheet at December 31,2015.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...