Question

At December 31, 2017, Flounder Corporation reported the following plant assets.

Land				$ 5,883,000
Buildings		$26,560,000
Less: Accumulated depreciation—buildings		23,384,925		3,175,075
Equipment		78,440,000
Less: Accumulated depreciation—equipment		9,805,000		68,635,000
Total plant assets				$77,693,075

During 2018, the following selected cash transactions occurred.

Apr.	1		Purchased land for $4,314,200.
May	1		Sold equipment that cost $1,176,600 when purchased on January 1, 2011. The equipment was sold for $333,370.
June	1		Sold land for $3,137,600. The land cost $1,961,000.
July	1		Purchased equipment for $2,157,100.
Dec.	31		Retired equipment that cost $1,372,700 when purchased on December 31, 2008. No salvage value was received.

Journalize the transactions. Flounder 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. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
April 1May 1June 1July 1Dec. 31
April 1May 1June 1July 1Dec. 31
	(To record depreciation on equipment sold)
April 1May 1June 1July 1Dec. 31
April 1May 1June 1July 1Dec. 31
April 1May 1June 1July 1Dec. 31
	(To record depreciation on equipment retired)

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List of Accounts

Record adjusting entries for depreciation for 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31
	(To record depreciation on buildings.)
Dec. 31
	(To record depreciation on equipment.)

eTextbook and Media

List of Accounts

Prepare the plant assets section of Flounder’s balance sheet at December 31, 2018. (Hint: You may wish to set up T accounts, post beginning balances, and then post 2018 transactions.) (List Plant Assets in order of Land, Building and Equipment.)

FLOUNDER CORPORATION Partial Balance Sheet                                                                       For the Year Ended December 31, 2018For the Month Ended December 31, 2018December 31, 2018
Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesPlant AssetsStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Plant AssetsTotal Stockholders' Equity
					$
			$
AddLess:
AddLess:
Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesPlant AssetsStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Plant AssetsTotal Stockholders' Equity					$

eTextbook and Media

Answer 1

Flounder corporation
Given ,
Buildings _ SLM dep. - 40 year useful life , no salvage value
Equipment - Slm dep., 10 year life, no salvage value
Apr-01	Land	4314200
	Cash		4314200
May-01	Dep. Exp. - equipment	39220		( 1176600 / 10 ) * 4/12 = 39220
	Acc. Dep. - equipment		39220
	Cash	333370
	Acc. Dep. - equipment	862840		( 1176600 * 7 /10 )+ 39220
	Gain on sale of equipment		19610
	Equipment		1176600
Jun-01	Cash	3137600
	Gain on sale of land		1176600
	Land		1961000
Jul-01	Equipment	2157100
	Cash		2157100
Dec. 31	Dep. Exp. - equipment	137270		( 1372700 / 10 ) = 137270
	Acc. Dep. - equipment		137270
	Acc. Dep. - equipment	1372700		( 1372700 * 9 /10 )+ 137270
	Equipment		1372700
Dec. 31	Dep. Exp. -Building	664000		( 26560000 * 1/40 )
	Acc. Dep. - Building		664000
Available balance in equipment account = 78440000 - 1176600 - 1372700 = $ 75890700
Dep. Chrged on this = 75890700 / 10 = $ 7589070
New equipment purchased on July 1 = 2157100
Dep. Charged on this = 2157100 / 10 * 6/12 = 107855
Dep. Expense = 7589070 + 107855 = 7696925
Dec. 31	Dep. Exp. - equipment	7696925
	Acc. Dep. - equipment		7696925
Balance sheet ( Partial )
Land	( 5883000+ 4314200 - 1961000 )		8236200
Buildings		26560000
Less:- A.D	( 23384925 + 664000 )	24048925	2511075
Equipment	( 75890700 + 2157100 )	78047800
Less:- A.D	( 9805000 + 39220 - 862840 + 137270 - 1372700 + 7696925)	15442875	62604925
Total Plant assets			73352200