Question

*Prepare the plant assets section of Amphonie's balance sheet at December 31, 2021 using the information below.

At December 31, 2020, Amphonie Company reported the following as plant assets.

Land				$ 3,980,000
Buildings		$28,210,000
Less: Accumulated depreciation—buildings		13,200,000		15,010,000
Equipment		48,670,000
Less: Accumulated depreciation—equipment		4,980,000		43,690,000
Total plant assets				$62,680,000

During 2021, the following selected cash transactions occurred.

April 1		Purchased land for $2,200,000.
May 1		Sold equipment that cost $840,000 when purchased on January 1, 2017. The equipment was sold for $504,000.
June 1		Sold land purchased on June 1, 2011 for $1,450,000. The land cost $399,000.
July 1		Purchased equipment for $2,480,000.
Dec. 31		Retired equipment that cost $491,000 when purchased on December 31, 2011. The company received no proceeds related to salvage.

Answer 1

Date	Accounts Titles and Explanation	Debit	Credit
Apr 1	Land	$2,200,000
	Cash		$2,200,000
	(To record purchase of land)
May 1	Depreciation Expense ($840,000/10 x 4/12)	$28,000
	Accumulated Depreciation - Equipment		$28,000
	(To record depreciation)
Note: Assume Equipment has 10 years of life
May 1	Cash	$504,000
	Accumulated Depreciation - Equipment	$364,000
	Equipment		$840,000
	Gain on Disposal of Plant Assets		$28,000
	(To record sale of equipment)
June 1	Cash	$1,450,000
	Land		$399,000
	Gain on Disposal of Plant Assets		$1,051,000
July 1	Equipment	$2,480,000
	Cash		$2,480,000
Dec 31	Depreciation Expense ($501,000/10 years)	$50,100
	Accumulated Depreciation - Equipment		$50,100
Dec 31	Accumulated Depreciation - Equipment	$501,000
	Equipment		$501,000