Land $ 3,000,000 Buildings $26,500,000 Less: Accumulated depreciation-buildings 12,100,000 14,400,000 Equipment 40,000,000 Less: Accumulated depreciation-equipment 5,000,000 35,000,000 Total plant assets $52,400,000 During 2008, the following selected cash transactions occurred. Apr. 1 Purchased land for $2,200,000. May 1 Sold equipment that cost $660,000 when purchased on January 1, 2001.
The equipment was sold for $200,000. June 1 Sold land for $1,800,000. The land cost $700,000. July 1 Purchased equipment for $1,300,000. Dec. 31 Retired equipment that cost $500,000 when purchased on December 31, 1998. No salvage value was received. Instructions (a) Journalize the transactions. (Hint: You may wish to set up T accounts, post beginning balances, and then post 2008 transactions.) Ruiz uses straight-line depreciation for buildings and equipment.
The buildings are estimated to have a 40-year useful 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 2008. (c) Prepare the plant assets section of Ruiz's balance sheet at December 31, 2008.