At December 31, 2007, Harrington Corporation reported these plant assets.

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 Total plant assets $63,400,000 During 2008, the following selected cash transactions occurred.

Apr. 1 Purchased land for $2,630,000.

May 1 Sold equipment that cost $600,000 when purchased on January 1, 2003.

The equipment was sold for $350,000.

June 1 Sold land purchased on June 1, 1995, for $1,800,000. The land cost

$500,000.

July 1 Purchased equipment for $800,000.

Dec. 31. Retired fully depreciated equipment that cost $470,000 when purchased on December 31, 1998. 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 2008 transactions.) Harrington 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 2008. (Note: The only assets that are fully depreciated are those that were retired on December sh)

(c) Prepare the plant assets section of Harrington's balance sheet at December 31, 2008.