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P10.5 (LO 2, 3, 5), AP At December 31, 2022, Grand Company reported the following as plant assets. Land $4,000,000 Buildings $28,500,000 Less: Accumulated depreciationbuildings
P10.5 (LO 2, 3, 5), AP At December 31, 2022, Grand Company reported the following as plant assets.
Land | $4,000,000 | |
Buildings | $28,500,000 | |
Less: Accumulated depreciationbuildings | 12,100,000 | 16,400,000 |
Equipment | 48,000,000 | |
Less: Accumulated depreciationequipment | 5,000,000 | 43,000,000 |
Total plant assets | $63,400,000 |
During 2023, the following selected cash transactions occurred.
April | 1 | Purchased land for $2,130,000. |
May | 1 | Sold equipment that cost $750,000 when purchased on January 1, 2019. The equipment was sold for $450,000. |
June | 1 | Sold land purchased on June 1, 2013 for $1,500,000. The land cost $400,000. |
July | 1 | Purchased equipment for $2,500,000. |
Dec. | 31 | Retired equipment that cost $500,000 when purchased on December 31, 2013. |
Instructions
- Journalize the transactions. (Hint: You may wish to set up T-accounts, post beginning balances, and then post 2023 transactions.) The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-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.
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Record adjusting entries for depreciation for 2023.
b. Depreciation ExpenseBuildings $570,000; Equipment $4,800,000
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Prepare the plant assets section of Grands balance sheet at December 31, 2023.
c. Total plant assets $61,760,000
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