Question

At December 31, 2022, Martinez Corporation reported the following plant assets.

Land				$ 3,783,000
Buildings		$26,590,000
Less: Accumulated depreciation—buildings		15,037,425		11,552,575
Equipment		50,440,000
Less: Accumulated depreciation—equipment		6,305,000		44,135,000
Total plant assets				$59,470,575

During 2023, the following selected cash transactions occurred.

Apr.	1		Purchased land for $2,774,200.
May	1		Sold equipment that cost $756,600 when purchased on January 1, 2016. The equipment was sold for $214,370.
June	1		Sold land for $2,017,600. The land cost $1,261,000.
July	1		Purchased equipment for $1,387,100.
Dec.	31		Retired equipment that cost $882,700 when purchased on December 31, 2013. No salvage value was received.

1.Journalize the transactions. Martinez 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.

2. Record adjusting entries for depreciation for 2023

3. Prepare the plant assets section of Martinez’s balance sheet at December 31, 2023. (Hint: You may wish to set up T accounts, post beginning balances, and then post 2023 transactions.)

Answer 1

Date	Account Title & Explanation	Debit	Credit
April 1	Land	2,774,200
	To, Cash		2,774,200
May 1	Depreciation Expense	25,220
	To, Accumulated Depreciation- Equipment		25,220
May 1	Cash	214,370
	Accumulated Depreciation- Equipment	554,840
	To, Equipment		756,600
	To, Gain on disposal of Equipment		12,610
June 1	Cash	2,017,600
	To, land		1,261,000
	To, gain on disposal of land		756,600
July 1	Equipment	1,387,100
	To, Cash		1,387,100
Dec 31	Depreciation Expense	88,270
	To, Accumulated Depreciation- Equipment		88,270
	Accumulated Depreciation- Equipment	882,700
	To, Equipment		882,700

     Closing Entries:-

Dec 31	Depreciation Expense	5,018,780
	To, Accumulated Depreciation- Equipment		5,018,780
	Depreciation Expense	664,750
	To, Accumulated Depreciation- Building		664,750

MARIGOLD CORPORATION
Partial Balance Sheet
December 31,2023
Plant Assets
Land		5,296,200
Buildings	26,590,000
Less: Accumulated Depreciation- Building	15,702,175	10,887,825
Equipment	50,187,800
Less:- Accumulated Depreciation- Equipment	9,999,730	40,188,070