Question

At December 31, 2017, Grand Company reported the following as plant assets.

Land				$ 4,320,000
Buildings		$29,800,000
Less: Accumulated depreciation—buildings		10,570,000		19,230,000
Equipment		47,520,000
Less: Accumulated depreciation—equipment		4,910,000		42,610,000
Total plant assets				$66,160,000

During 2018, the following selected cash transactions occurred.

April 1		Purchased land for $2,000,000.
May 1		Sold equipment that cost $840,000 when purchased on January 1, 2014. The equipment was sold for $504,000.
June 1		Sold land purchased on June 1, 2008 for $1,430,000. The land cost $393,000.
July 1		Purchased equipment for $2,440,000.
Dec. 31		Retired equipment that cost $480,000 when purchased on December 31, 2008. The company received no proceeds related to salvage.

A: 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.

B: Record adjusting entries for depreciation for 2018.

Answer 1