At December 31, 1996, Yount Corporation reported the following as plant assets:

During 1997, the following selected cash transactions occurred:
April 1 Purchased land for \(\$ 2,630,000\).
May 1 Sold equipment that cost \(\$ 600,000\) when purchased on January 1, 1993. The equipment was sold for \(\$ 370,000\).
June 1 Sold land purchased on June 1, 1987, for \(\$ 1,800,000\). The land cost \(\$ 200,000\).
July 1 Purchased equipment for \(\$ 1,200,000\).
Dec. 31 Retired equipment that cost \(\$ 500,000\) when purchased on December 31, 1987. No salvage value was received.
\section*{Instructions}

(a) Journalize the above transactions. Yount 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 1997.

(c) Prepare the plant asset section of Yount's balance sheet at December 31, 1997.

Transcribed Image Text:

Land $ 4,000,000 Buildings $28,500,000 Less: Accumulated depreciation-buildings 12,100,000 16,400,000 Equipment 48,000,000 Less: Accumulated depreciation-equipment 5,000,000 43,000,000 Total plant assets $63,400,000