Reporting and Analyzing Long-Lived Assets
P9.2A (LO 2, 3, 5), AP At December 31, 2022, Arnold Corporation reported the following plant assets.
Land
Buildings
Less: Accumulated depreciation-buildings
Equipment
Less: Accumulated depreciation-equipment
Total plant assets
During 2023, the following selected cash transactions occurred.
Apr. 1 Purchased land for $2,200,000.
May 1 Sold equipment that cost $600,000 when purchased on January 1, 2016.
The equipment was sold for $170,000.
June 1 Sold land for $1,600,000. The land cost $1,000,000.
July 1 Purchased equipment for $1,100,000.
Dec. 31 Retired equipment that cost $700,000 when purchased on December 31, 2013. 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 2023 transactions.) Arnold 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 esti-
mated 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 2023.
c. Prepare the plant assets section of Arnold's balance sheet at December 31, 2023.
$ 3,000,000
$26,500,000
11,925,000
14,575,000
40,000,000
5,000,000
35,000,000
$52,575,000