At December 31, 2017, Arnold Corporation reported the following plant assets. Land $ 3,000,000 14,575,000 Buildings Less: Accumulated depreciation-buildings Equipment Less: Accumulated depreciation-equipment Total plant assets $26,500,000 11,925,000 June 1 July 1 Dec. 31 40,000,000 5,000,000 During 2018, the following selected cash transactions occurred. Apr. 1 Purchased land for $2,200,000. May 1 35,000,000 $52,575,000 Sold equipment that cost $600,000 when purchased on January 1, 2011. The equipment was sold for $170,000. Sold land for $1,600,000. The land cost $1,000,000. Purchased equipment for $1,100,000. Retired equipment that cost $700,000 when purchased on December 31, 2008. No salvage value was received. Instructions (a) Journalize the transactions. (Hint: You may wish to set up T-accounts, post beginning balances, and then post 2018 transactions.) Arnold uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 40-year useful life and no salvage value; the equipment is estimated to have a 10-year useful life and no sal- vage value. Update depreciation on assets disposed of at the time of sale or retirement. (b) Record adjusting entries for depreciation for 2018. (c) Prepare the plant assets section of Arnold's balance sheet at December 31, 2018.
At December 31, 2017, Arnold Corporation reported the following plant assets. Land $ 3,000,000 14,575,000 Buildings Less: Accumulated depreciation-buildings Equipment Less: Accumulated depreciation-equipment Total plant assets $26,500,000 11,925,000 June 1 July 1 Dec. 31 40,000,000 5,000,000 During 2018, the following selected cash transactions occurred. Apr. 1 Purchased land for $2,200,000. May 1 35,000,000 $52,575,000 Sold equipment that cost $600,000 when purchased on January 1, 2011. The equipment was sold for $170,000. Sold land for $1,600,000. The land cost $1,000,000. Purchased equipment for $1,100,000. Retired equipment that cost $700,000 when purchased on December 31, 2008. No salvage value was received. Instructions (a) Journalize the transactions. (Hint: You may wish to set up T-accounts, post beginning balances, and then post 2018 transactions.) Arnold uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 40-year useful life and no salvage value; the equipment is estimated to have a 10-year useful life and no sal- vage value. Update depreciation on assets disposed of at the time of sale or retirement. (b) Record adjusting entries for depreciation for 2018. (c) Prepare the plant assets section of Arnold's balance sheet at December 31, 2018.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:At December 31, 2017, Arnold Corporation reported the following plant assets.
Land
$3,000,000
14,575,000
Buildings
Less: Accumulated depreciation-buildings
Equipment
Less: Accumulated depreciation equipment
Total plant assets
$26,500,000
11,925,000
June 1
July 1
Dec. 31
40,000,000
5,000,000
During 2018, the following selected cash transactions occurred.
Apr. 1 Purchased land for $2,200,000.
May 1
35,000,000
$52,575,000
Sold equipment that cost $600,000 when purchased on January 1, 2011.
The equipment was sold for $170,000.
Sold land for $1,600,000. The land cost $1,000,000.
Purchased equipment for $1,100,000.
Retired equipment that cost $700,000 when purchased on December 31,
2008. No salvage value was received.
Instructions
(a) Journalize the transactions. (Hint: You may wish to set up T-accounts, post beginning
balances, and then post 2018 transactions.) Arnold uses straight-line depreciation for
buildings and equipment. The buildings are estimated to have a 40-year useful life and
no salvage value; the equipment is estimated to have a 10-year useful life and no sal-
vage value. Update depreciation on assets disposed of at the time of sale or retirement.
(b) Record adjusting entries for depreciation for 2018.
(c) Prepare the plant assets section of Arnold's balance sheet at December 31, 2018.
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