(Learning Objective 2: Recording plant asset transactions; reporting on the balance sheet) Highland Lakes Resort reported the following on its balance sheet at December 31, 20X5:
|
Property, plant, and equipment, at cost: |
|
|
Land |
$ 140,000 |
|
Buildings |
700,000 |
|
Less: Accumulated depreciation |
(340,000) |
|
Equipment |
400,000 |
|
Less: Accumulated depreciation |
(260,000) |
In early July 20X6, the resort expanded operations and purchased additional equipment at a cost of $100,000. The company depreciates buildings by the straight line method over 20 years with residual value of $80,000. Due to obsolescence, the equipment has a useful life of only 10 years and is being depreciated by the double declining balance method with zero residual value.
Required
1. Journalize Highland Lakes Resort’s plant asset purchase and depreciation transactions for 20X6. 2. Report plant assets on the December 31, 20X6, balance sheet.