Question

At December 31, 2017, Blue Corporation reported the following plant assets. Land $ 5,853,000 Buildings $26,740,000 Less: Accumulated depreciation—buildings 23,265,675 3,474,325 Equipment 78,040,000 Less: Accumulated depreciation—equipment 9,755,000 68,285,000 Total plant assets $77,612,325 During 2018, the following selected cash transactions occurred. Apr. 1 Purchased land for $4,292,200. May 1 Sold equipment that cost $1,170,600 when purchased on January 1, 2011. The equipment was sold for $331,670. June 1 Sold land for $3,121,600. The land cost $1,951,000. July 1 Purchased equipment for $2,146,100. Dec. 31 Retired equipment that cost $1,365,700 when purchased on December 31, 2008. No salvage value was received.

1) Record any adjustments to accounts for depreciation for 2018. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Assets = Liabilities + Stockholders' Equity Retained Earnings Cash + Notes Rec. + Interest Rec. + Land + Buildings - Accum. Depr. - Bldgs. + Equipment - Accum. Depr. - Equip. = Interest Payable + Notes Payable + Common Stock + Revenue - Expense - Dividend Bal. $ $ $ $ $ $ $ $ $ $ $ $ $ $ Apr. 1 May 1 May 1 June 1 July 1 Dec. 31 Dec. 31 Dec. 31 $ $ $ $ Dec. 31 Dec. 31 Dec. 31

2) Prepare the property, plant, and equipment section of the company’s statement of financial position at December 31. (List Property, Plant and Equipment in order of Land, Buildings and Equipment.) . Statement of Financial Position (Partial) Land $ Building $ : Accumulated Depreciation-Buildings Equipment : Accumulated Depreciation-Equipment $

Answer 1

1.

1-Apr	Land	4,292,200
	Cash		4,292,200
	(Purchased land)

1-May	Cash	331,670
	Equipment		1,170,600
	Acc. Depre Equipment	838,930
	(Equipment Sold (Data missing for the depreciation calculation, hence the difference accounted in Acc. Depreciation account)

1-Jun	Cash	3,121,600
	Land		1,951,000
	Gain from sale of land		1,170,600
	(Sold Land)

1-Jul	Equipment	2,146,100
	Cash		2,146,100
	(Purchased Equipment)

31-Dec	Acc.Depreciation	1,365,700
	Equipment		1,365,700
	(Equipment Retired)

2.

December 31 2018
Plant Assets		2018
Land		8,194,200
Buildings	26,740,000
Less:Acc Depre	(23,265,675)	3,474,325
Equipment	77,649,800
Less:Acc Depre	(7,550,370)	70,099,430
Total Plant Assets		81,767,955

Workings given below.

There is no data available to calculate the Depreciation expense for the year.

	Land	Buildings	Acc Dep Buildings	Equipment	Acc Dep Equipment
Opening Balance 2018	5,853,000	26,740,000	(23,265,675)	78,040,000	(9,755,000)
Apr 1	4,292,200
May 1				(1,170,600)	838,930
Jun 1	(1,951,000)
Jul 1				2,146,100
Dec 31				(1,365,700)	1,365,700
Total	8,194,200	26,740,000	(23,265,675)	77,649,800	(7,550,370)