Acc280 Financial Accounting: P9-2A At December 31, 2007, Ruiz Corporation reported

Acc280 Financial Accounting
P9-2A
At December 31, 2007, Ruiz Corporation reported the following plant assets.
Land $3,000,000
Buildings $26,500,000
Less: Accumulated depreciation—buildings 12,100,000 $14,400,000
Equipment 40,000,000
Less: Accumulated depreciation—equipment 5,000,000 $35,000,000
Total plant assets $52,400,000

During 2008, the following selected cash transactions occurred.
Apr 1 Purchased land for $2,200,000.
May 1 Sold equipment that cost $660,000 when purchased on January 1, 2001. The equipment was sold for $200,000.
Jun 1 Sold land for $1,800,000. The land cost $700,000.
Jul 1 Purchased equipment for $1,300,000.
Dec 31 Retired equipment that cost $500,000 when purchased on December 31, 1998. 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 2008 transactions.) Ruiz 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 2008.
(c) Prepare the plant assets section of Ruiz’s balance sheet at December 31, 2008.
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