At December 31, 2022, Arnold Corporation reported the following plant assets. 

During 2023, the following selected cash transactions occurred. 

Apr. 1 Purchased land for $2,200,000. 

May 1 Sold equipment that cost $600,000 when purchased on January 1, 2016. The equipment was sold for $170,000. 

June 1 Sold land for $1,600,000. The land cost $1,000,000. 

July 1 Purchased equipment for $1,100,000. 

Dec. 31 Retired equipment that cost $700,000 when purchased on December 31, 2013. No salvage value was received. 

Instructions.

a. Journalize the 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 salvage value. Update depreciation on assets disposed of at the time of sale or retirement.

b. Record adjusting entries for depreciation for 2023. 

c. Prepare the plant assets section of Arnold’s balance sheet at December 31, 2023. 

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Land $ 3,000,000 Buildings $26,500,000 Less: Accumulated depreciation-buildings Equipment Less: Accumulated depreciation-equipment Total plant assets 11,925,000 14,575,000 40,000,000 5,000,000 35,000,000 $52,575,000