Question

(To record sale of equipment) SHOW LIST OF ACCOUNTS Problem 10-05A a-c (Video) At December 31, 2020, Pronghorn Company reported the following as plant assets. LINK TO TEXT $ 4,320,000 LINK TO TEXT LINK TO TEXT 19,230,000 Land Buildings Less: Accumulated depreciation-buildings Equipment Less: Accumulated depreciation, equipment Total plant assets $29,800,000 10,570,000 47,520,000 4,910,000 Prepare the plant assets section of Pronghorn's balance sheet at December 31, 2021. (List Plant Assets in order of Land, Buildings and Equipment.) 42,610,000 $66,160,000 Pronghorn Company Balance Sheet (Partial) During 2021, the following selected cash transactions occurred. (To record depreciation) April 1 Purchased land for $2,000,000. May 1 Sold equipment that cost $840,000 when purchased on January 1, 2017. The equipment was sold for $504,000. June 1 Sold land purchased on June 1, 2011 for $1,430,000. The land cost $393,000. July 1 Purchased equipment for $2,440,000. Dec. Retired equipment that cost $480,000 when purchased on December 31, 2011. The 31 company received no proceeds related to salvage. (To record retirement of equipment) SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-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. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) 1 11 LINK TO TEXT Date Account Titles and Explanation Debit Credit Record adjusting entries for depreciation for 2021. (Credit account titles are automatically anually. Recores inte automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Click if you would like to Show Work for this question:Open Show Work Date Account Titles and Explanation Debit Credit (To record depreciation) (To record building depreciation) May 1 (To record equipment de recitin)

Answer 1

Date	Account Titles and Explanation	Debit	Credit
April 1	Land	2000000
	Cash		2000000
May 1	Depreciation expense ($840000/10 x 4/12)	28000
	Accumulated depreciation-equipment		28000
	(To record depreciation)
May 1	Cash	504000
	Accumulated depreciation-equipment*	364000
	Gain on disposal		28000
	Equipment		840000
	(To record sale of equipment)
June 1	Cash	1430000
	Land		393000
	Gain on disposal		1037000
July 1	Equipment	2440000
	Cash		2440000
Dec. 31	Depreciation expense ($480000/10)	48000
	Accumulated depreciation-equipment		48000
	(To record depreciation)
Dec. 31	Accumulated depreciation-equipment	480000
	Equipment		480000
	(To record retirement of equipment)

*Accumulated depreciation-equipment:

Annual depreciation = $840000/10 = $84000

Accumulated depreciation = ($84000 x 4) + $28000 = $364000

Date	Account Titles and Explanation	Debit	Credit
Dec. 31	Depreciation expense ($29800000/50)	596000
	Accumulated depreciation-buildings		596000
	(To record building depreciation)
Dec. 31	Depreciation expense*	4742000
	Accumulated depreciation-equipment		4742000
	(To record equipment depreciation)

*Depreciation expense:

Depreciation on Jan. 1 balance: ($47520000 - $840000 - $480000)/10 = $46200000/10 = $4620000

Depreciation on new equipment purchased: ($2440000/10 x 6/12) = $122000

Total depreciation expense = $4620000 + $122000 = $4742000

Pronghorn Company
Balance Sheet (Partial)
December 31, 2021
Property, Plant, and Equipment
Land		5927000
Buildings	29800000
Less: Accumulated depreciation-Buildings	11166000	18634000
Equipment	48640000
Less: Accumulated depreciation-Equipment	4142000	44498000
Total property, plant, and equipment		69059000