At December 31, 2025, Arnold Corporation reported the following plant assets.

During 2026, the following selected cash transactions occurred.

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 2026 .

c. Prepare the plant assets section of Arnold's balance sheet at December 31, 2026.

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