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    Journalization of Property, Plant and Equipment

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    At June 30, 2006, Pouncer Ltd. reported these PPE assets:

    Land $4,000,000
    Buildings 28,500,000
    Less: Accumulated depreciation - buildings 12,100,000 16,400,000
    Equipment 48,000,000
    Less: Accumulated depreciation - equipment 5,000,000 43,000,000
    Total plant assets $63,400,000

    During the fiscal year ending June 30, 2006, the following selected cash transactions occurred:
    Aug 1 - Purchased land for $2,630,000.
    Oct 1 - Sold equipment that cost $675,000 when purchased on January 1, 2000. The equipment was sold for $350,000.
    Dec 1 - Sold land purchased on June 1, 1992 for $1,800,000. The land cost $300,000.

    During 2007, the following transactions occurred:
    Jan 1 - Purchased equipment for $1,000,000.
    Jun 30 - Retired equipment that cost $470,000 when purchased on December 31, 1995. No salvage value was received.

    Journalize the above transactions. The company 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. (List multiple debit/credit entries in descending order of amount.)

    Utilizing the updated accounts, create a partial balance sheet for the Plant Assets Section of the company's financial report for the year ending June 30, 2007.

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    Solution Preview

    The attached MS Excel spreadsheet contains a fully detailed example on the ...

    Solution Summary

    The attached MS Excel spreadsheet contains a fully detailed example on the journalization of a firm's PPE from a list of outstanding transactions, as well as an illustrative example of the necessary updates to the Plant Assets section of the company's balance sheet resulting from such transactions.