P9-1B Franz Company was organized on January 1. During the first year of operations, the following plant asset expenditures and receipts were recorded in random order.

Debits

1. Cost of real estate purchased as a plant site (land $190,000 and building $80,000) $ 270,000

2. Accrued real estate taxes paid at time of purchase of real estate 6,000

3. Cost of demolishing building to make land suitable for construction of new building 32,000

4. Cost of filling and grading the land 6,700

5. Excavation costs for new building 21,900

6. Architects fees on building plans 44,000

7. Full payment to building contractor 629,500

8. Cost of parking lots and driveways 36,000

9. Real estate taxes paid for the current year on land 7,300

$1,053,400

Credits

10. Proceeds for salvage of demolished building $ 12,700

Instructions

Analyze the transactions using the table column headings provided here. Enter the number of each transaction in the Item column, and enter the amounts in the appropriate columns. For amounts in the Other Accounts column, also indicate the account titles.

Item Land Buildings Other Accounts

P9-2B

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

Land $ 4,000,000

Buildings $28,800,000 Less: Accumulated depreciationbuildings 11,520,000 17,280,000

Equipment 48,000,000 Less: Accumulated depreciationequipment 5,000,000 43,000,000

Total plant assets $64,280,000

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

1. 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.
2. Record adjusting entries for depreciation for 2012. (Note: The only assets that are fully depreciated are those that were retired on December 31.)
3. Prepare the plant assets section of Craigs balance sheet at December 31, 2012.