Problem 1 At December 31, 2025, Arnold Corporation reported the following plant assets: During 2026, the following selected cash transactions occurred. April 1 Purchased land for $2,2 00,000. May 1 Sold equipment that cost $600,000 when purchased on January 1,2019. The equipment was sold for $170,000 June 1 Sold land for $1,600,000. The land cost $1,000,000. July 1 Purchased equipment for $1,100,000. Dec. 31 Retired equipment that cost $700,000 when purchased on December 31, 2016. No salvage value received. Instructions a. Journalize the transactions. (Hint: Set up t-accounts, post beginning balances, then post 2026 transactions.) Arnold uses straight-line deprecation 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 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of retirement. b. Record adjusting entries for depreciation for 2026. c. Prepare the plant assets section of Arnold's balance sheet at December 31, 2026.
Problem 1 At December 31, 2025, Arnold Corporation reported the following plant assets:
During 2026, the following selected cash transactions occurred. April 1 Purchased land for $2,2 00,000. May 1 Sold equipment that cost $600,000 when purchased on January 1,2019. The equipment was sold for $170,000 June 1 Sold land for $1,600,000. The land cost $1,000,000. July 1 Purchased equipment for $1,100,000. Dec. 31 Retired equipment that cost $700,000 when purchased on December 31, 2016. No salvage value received. Instructions a. Journalize the transactions. (Hint: Set up t-accounts, post beginning balances, then
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