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.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.5P
Related questions
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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
