At December 31, 2011, Starkey Company reported the following as plant assets.
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During 2012, the following selected cash transactions occurred.
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Journalize a series of equipment transactions related to purchase, sale, retirement, and depreciation.
Instructions
(a) Journalize the above transactions. Starkey 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 2012.
Check answers: Depreciation expense
Building $400,000;
Equipment $2,983,000
(c) Prepare the plant assets section of Starkey’s balance sheet at December 31, 2012.
check Answer: Total plant assets $38,295,000