Accounting for Plant Assets
Not what you're looking for?
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.
Instructions
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.
Purchase this Solution
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
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 ...
Purchase this Solution
Free BrainMass Quizzes
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Operations Management
This quiz tests a student's knowledge about Operations Management
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce