At December 31, 2001, Los Alamos Corporation reported these plant assets:

Instructions

(a) Journalize the transactions. [Hint: You may wish to set up T accounts, post beginning balances, and then post 2002 transactions.] Los Alamos uses straight-line depreciation for 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 2002.

(c) Prepare the plant asset section of Los Alamos’ balance sheet at December 31, 2002.

Transcribed Image Text:

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 $63,400,000 Total plant assets During 2002, the following selected cash transactions occurred: Apr. 1 May 1 June 1 July 1 Dec. 31 Purchased land for $2,630,000. Sold equipment that cost $600,000 when purchased on January 1, 1998. The equipment was sold for $350,000. Sold land purchased on June 1, 1992, for $1,800,000. The land cost $200,000. Purchased equipment for $1,000,000. Retired equipment that cost $500,000 when purchased on December 31, 1992. No salvage value was received.