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At January 1, 2022, Sandhill Co. reported the following property, plant, and equipment accounts: Accumulated depreciation—buildings...

At January 1, 2022, Sandhill Co. reported the following property, plant, and equipment accounts:

Accumulated depreciation—buildings $60,700,000
Accumulated depreciation—equipment 54,600,000
Buildings 97,400,000
Equipment 150,800,000
Land 21,000,000


The company uses straight-line depreciation for buildings and equipment, its year-end is December 31, and it makes adjustments annually. 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.

During 2022, the following selected transactions occurred:

Apr. 1 Purchased land for $5 million. Paid $1 million cash and issued a 3-year, 6% note payable for the balance. Interest on the note is payable annually each April 1.
May 1 Sold equipment for $230,000 cash. The equipment cost $4 million when originally purchased on January 1, 2014.
June 1 Sold land for $5 million. Received $900,000 cash and accepted a 3-year, 5% note for the balance. The land cost $1 million when purchased on June 1, 2016. Interest on the note is due annually each June 1.
July 1 Purchased equipment for $2 million cash.
Dec. 31 Retired equipment that cost $1 million when purchased on December 31, 2012. No proceeds were received.

(a)

Prepare a tabular summary that includes the property, plant, and equipment balances as of January 1, 2022. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)

Solutions

Expert Solution

Property, Plant and Equipment
PARTICULARS ORIGINAL COST   DEPRECIATION   NET BOOK VALUE
As at Additions Deletions   As at Upto Additions Deletions   Upto WDV as at
01.01.2022    During the period 31.12.2022 01.01.2022    During the period 31.12.2022 31.12.2022 01.01.2022
Buildings     9,74,00,000       9,74,00,000 6,07,00,000      24,35,000                   -        6,31,35,000 3,42,65,000           3,67,00,000
                    -  
Land     2,10,00,000      50,00,000      50,00,000       2,27,70,000                   -                     -                          -   2,27,70,000           2,10,00,000
                    -  
Equipment 15,08,00,000      20,00,000        2,30,000     15,25,70,000 5,46,00,000 1,51,80,000                   -        6,97,80,000 8,27,90,000           9,62,00,000

ekkarill92 answered 2 years ago
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