At December 31, 2016, Durango Ltd. reported the following as plant assets.
Land......................................................................................£ 2,000,000
Buildings............................................................£28,500,000
Less: Accumulated depreciation-buildings.....................12,100,000......16,400,000
Equipment.............................................................30,000,000
Less: Accumulated depreciation-equipment.....................4,000,000......26,000,000
Total plant assets.......................................................................£44,400,000
During 2017, the following selected cash transactions occurred.
Mar. 1 Purchased land for £1,350,000.
April 1 Sold equipment that cost £420,000 when purchased on January 1, 2013. The equipment was sold for £248,000.
June 1 Sold land purchased on June 1, 2007, for £1,000,000. The land cost £310,000.
Oct. 1 Purchased equipment for £1,260,000.
Dec. 31 Retired equipment that cost £300,000 when purchased on December 31, 2007. No residual value was received.
Instructions
(a) Journalize the above transactions. Durango uses straight-line depreciation for buildings and equipment. 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. Update depreciation on assets disposed of at the time of sale or retirement.
(b) Record adjusting entries for depreciation for 2017.
(c) Prepare the plant assets section of Durango's statement of financial position at December 31, 2017.