At December 31, 2010, Kretsinger Corporation reported these plant assets.
|
Land |
$ 4,000,000 |
|
|
Buildings |
$28,500,000 |
|
|
Less: Accumulated depreciation—buildings |
12,100,000 |
16,400,000 |
|
Equipment |
48,000,000 |
|
|
Less: Accumulated depreciation—equipment |
5,000,000 |
43,000,000 |
|
Total plant assets |
$63,400,000 |
|
During 2011, the following selected cash transactions occurred.
|
Apr. |
1 |
Purchased land for $2,630,000. |
|
May |
1 |
Sold equipment that cost $750,000 when purchased on January 1, 2006. |
|
June |
1 |
Sold land purchased on June 1, 1998, for $1,800,000. The land cost |
|
July |
1 |
Purchased equipment for $800,000. |
|
Dec. |
31 |
Retired fully depreciated equipment that cost $470,000 when purchased |
Instructions
(a) Journalize the transactions. (Hint:You may wish to set up T accounts, post beginning balances, and then post 2011 transactions.) Kretsinger uses straight line depreciationfor buildings and equipment. The buildings are estimated to have a 40 year 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 2011.
(c) ?Prepare the plant assets section of Kretsinger’s balance sheet at December 31, 2011.