At December 31, 2001, Jerry Hamsmith Corporation reported these plant assets:

During 2002, the following selected cash transactions occurred:

Instructions

(a) Journalize the transactions. [Hint: You may wish to set up T accounts, post beginning balances, and then post 2002 transactions.] Hamsmith 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 salvage value. Update depreciation on assets disposed of at the time of sale or retirement.

(b) Record adjusting entries for depreciation for 2002.

(c) Prepare the plant assets section of Hamsmith’s balance sheet at December 31, 2002.

Transcribed Image Text:

Land $ 3,000,000 Buildings $26,500,000 Less: Accumulated depreciation-buildings Equipment 12,100,000 14,400,000 40,000,000 Less: Accumulated depreciation-equipment Total plant assets 5,000,000 35,000,000 $52,400,000