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Accounting for Plant Assets

Please see attachment.
3 part problem
Answer in excel format please.

At Decemeber 31, 2007, Ruiz Corporation reported the following plant assets.

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 occured
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 Decemeber 31, 1998.
No salvage value was recieved.

a) Journalize the transactions above. 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 balancve sheet at Decemeber 31, 2008.


Solution Preview

a. Journal Entries
April 1 Land 2,200,000 Land is purchased for cash
Cash 2,200,000

May 1 Depreciation Expense 22,000 The equipment is sold, we adjust the depreciation
Accumulated Depreciation- account for 4 months till May 1, given that the
Equipment 22,000 life of equipment is 10 years
($660,000 X 1/10 X 4/12)

1 Cash 200,000
Accumulated Depreciation-
Equipment 484,000
Equipment 660,000
Gain on Disposal 24,000

Cost $660,000 The calculation of gain
Accum. depr.-Equipment 484,000 The accumulated depreciation is for 7 years + 4 months
[($660,000 X 1/10) X 7 + $22,000)]
Book value 176,000
Cash proceeds 200,000
Gain on disposal $24,000 ...

Solution Summary

The solution explains how to record various transactions relating to plant assets and to prepare the plant assets section of the balance sheet