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at december 31 2012 rivera corporation reported the following plant assets 534570

At December 31, 2012, Rivera Corporation reported the following plant assets.

Land

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Buildings

$26,500,000

$ 3,000,000

Less: Accumulated depreciation—buildings

11,925,000

14,575,000

Equipment

40,000,000

Less: Accumulated depreciation—equipment

5,000,000

35,000,000

Total plant assets

$52,575,000

During 2013, the following selected cash transactions occurred.

Apr. 1 Purchased land for $2,200,000.

May 1 Sold equipment that cost $600,000 when purchased on January 1, 2006. The equipment was sold for $170,000.

June 1 Sold land for $1,600,000. The land cost $1,000,000.

July 1 Purchased equipment for $1,100,000.

Dec. 31 Retired equipment that cost $700,000 when purchased on December

Dec. 31, 2003. No salvage value was received.

Instructions

(a) Journalize the transactions. (Hint:You may wish to set up T accounts, post beginning balances, and then post 2013 transactions.) Rivera 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.

(b) Record adjusting entries for depreciation for 2013.

(c) Prepare the plant assets section of Rivera”s balance sheet at December 31, 2013.

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