At December 31, 2011, Craig Corporation reported these plant assets.

During 2012, the following selected cash transactions occurred.
Apr. 1 Purchased land for $2,600,000.
May 1 Sold equipment that cost $750,000 when purchased on January 1, 2007.
The equipment was sold for $367,000.
June 1 Sold land purchased on June 1, 2000, for $1,800,000. The land cost $800,000.
Sept. 1 Purchased equipment for $840,000.
Dec. 31 Retired fully depreciated equipment that cost $470,000 when purchased on December 31, 2002. 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 2012 transactions.) Craig 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 2012. (Note: The only assets that are fully depreciated are those that were retired on December 31.)

(c) Prepare the plant assets section of Craig’s balance sheet at December 31, 2012.

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Land Buildings $4,000,000 $28,800,000 Less: Accumulated depreciation-buildings Equipment Less: Accumulated depreciation-equipment Total plant assets 11,520,000 17,280,000 48,000,000 5,000,000 43,000,000 $64,280,000