REPORTING AND ANALYZING LONG-LIVED ASSETS

Problem 2 $5,000,000 At December 31, 2020, Maguire Inc. reported these plant assets. Land Buildings $25,000,000 Less: Accumulated depreciation - Buildings 10.000.000 Building, net Equipment 20,000,000 Less: Accumulated depreciation - Equipment 4,000,000 Equipment, net Total plant assets 15,000,000 16,000,000 $36,000,000 During 2020, the following selected cash transactions occurred: Mar 1 Purchased land for $3,000,000. June 1 Sold land purchased on June 1, 2005, for $2,000,000. The land cost is $500,000. Jul 1 Sold equipment that cost $1,000,000 when purchased on January 1, 2016. The equipment was sold for $250,000. Oct 1 Purchased equipment for $2,000,000. Dec 31 Retired equipment that cost $500,000 when purchased on December 31, 2016. No salvage value was received. Required: Journalize the transactions for 2020. Hints: Pouncer uses straight-lime depreciation for building and equipment. The buildings are estimated to have a 25-year life and no salvage value, the equipment is estimated to have a 5-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement