Question 2 At January 1, 2018, Oriole Limited reported the following property, plant, and equipment accounts: Accumulated depreciation-buildings $67,700,000 Accumulated depreciation equipment 56,500,000 Buildings 94,700,000 Equipment 157,500,000 21,000,000 Land The company uses straight line depreciation for buildings and equipment, its year and is December 31, and it makes adjusting entries annually. The buildings are estimated to have a 40-year useful and no residual value; the equipment is estimated to have a 10-year useful life and no residual value During 2018, the following selected transactions occurred: Apr. Purchased land for $4,010,000. Paid $1,050,000 cash and issued a three year, mortore payable for the balance. Interest on the mortgage is payable annually each April May 1 Sold equipment for $280,000 cash. The equipment cost $2,553,600 when originally purchased on January 1, 2010, June 1 Sold and for $3,520,000. Received 917,000 cash and accepted a three year, note for the balance. The land cost $1,500,000 when purchased on June 1, 2012. Interest on the note is due annually each lune 1 July 1 Purchased equipment for $2,100,000 cash Dec 31 Retired equipment that cost $900,000 when purchased on January 1, 2009. No proceeds were received 31 Tested and for impairment and found that its recoverable value was $21,000,000 Apr. 1 Land 1,050,000 | Mortgage Payable 2,960,000 1 Depreciation Expense 85,120 Accumulatila Depreciation - Equipment (To record depreciation expense) May 1 Cash Accumulated Depreciation - Equipment Loss on Disposal 2,553,600 Equipment (To record loss/gain on sale of equipment) June 1 Cash Notes Receivable T Land 1 1,500,000 Gain on Disposal (To record loss/gain on sale of land) O 2 2,028,800 ,028,000 Equipment Cash T 2,100,000 12,100,000 1 90,000 L 2,100,000 Dec. 31 Depreciation Expense 90,000 Accumulated Depreciation - Equipment 90,000 ,000 (To record depreciation expense) Dec. 31 8 Accumulated Depreciation - Equipment 1 Equipment (To record the retirement of equipment) Dec. 319 impairment Loss 900,000 21,000,000 Land (To record impairment loss) I 21,000,000 Date Account Titles and Explanation Credit Debit Dec. 31 Depreciation Expense 2,367,500 POP Accumulated Depreciation - Buildings 2,367,500 (To record depreciation expense on buildings) Dec. 31 Depreciation Expense 15,622,320 Accumulated Depreciation - Equipment 15,622,320 (To record depreciation expense on equipment) Dec. 31 Interest Expense 133,200 1 Interest Payable 133,200 (To record interest expense) Dec. 31 Interest Receivable 76,160 Interest Revenue 76,160 (To record interest revenue) ORIOLE LIMITED Statement of Financial Position (Partial) December 31, 2018 Assets Property, Plant, and Equipment 23,510,000 Land | Buildings 94,700,000 Accumulated Depreciation - Buildings 70,067,500 24,632,500 Equipment 156,146,400 Accumulated Depreciation - Equipment 69,269,440 86,876,960 Total Property, Plant, and Equipment 135,019,460