At December 31, 2020, Maguire Inc. reported these plant assets. |
|
Land |
|
$5,000,000 |
|
|
Buildings |
$25,000,000 |
|
|
|
Less: Accumulated depreciation - Buildings |
10,000,000 |
|
|
|
Building, net |
|
15,000,000 |
|
|
Equipment |
20,000,000 |
|
|
|
Less: Accumulated depreciation - Equipment |
4,000,000 |
|
|
|
Equipment, net |
|
16,000,000 |
|
|
Total plant assets |
|
$36,000,000 |
|
|
|
|
During 2020, the following selected cash transactions occurred:
Mar 1 Purchased land for $3,000,000.
June 1 Sold land purchased on June 1, 2005, for $2,000,000. The land cost is $500,000.
Jul 1 Sold equipment that cost $1,000,000 when purchased on January 1, 2016. The equipment was sold for $250,000.
Oct 1 Purchased equipment for $2,000,000.
Dec 31 Retired equipment that cost $500,000 when purchased on December 31, 2016.
No salvage value was received.
Required:
Journalize the transactions for 2020.
Hints: Pouncer uses straight-lime depreciation for building and equipment. The buildings are
estimated to have a 25-year life and no salvage value, the equipment is estimated to have a 5-year
useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement.
Extracted text: At December 31, 2020, Maguire Inc. reported these plant assets. Land Buildings Less: Accumulated depreciation - Buildings Building, net Equipment Less: Accumulated depreciation - Equipment Equipment, net Total plant assets $5,000,000 $25,000,000 10,000,000 15,000,000 20,000,000 4,000,000 16,000,000 $36,000,000 During 2020, the following selected cash transactions occurred: Mar 1 Purchased land for $3,000,000. June 1 Sold land purchased on June 1, 2005, for $2,000,000. The land cost is $500,000. Sold equipment that cost $1,000,000 when purchased on January 1, 2016. The equipment was sold for $250,000. Purchased equipment for $2,000,000. Jul 1 Oct 1 Dec 31 Retired equipment that cost $ 500,000 when purchased on December 31, 2016. No salvage value was received. Required: Journalize the transactions for 2020. Hints: Pouncer uses straight-lime depreciation for building and equipment. The buildings are estimated to have a 25-year life and no salvage value, the equipment is estimated to have a 5-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement.