Question

At December 31, 2017, Novak Corporation reported the following plant assets. Land $ 3,198,000 Buildings $26,610,000 Less: Accumulated depreciation—buildings 12,712,050 13,897,950 Equipment 42,640,000 Less: Accumulated depreciation—equipment 5,330,000 37,310,000 Total plant assets $54,405,950 During 2018, the following selected cash transactions occurred. Apr. 1 Purchased land for $2,345,200. May 1 Sold equipment that cost $639,600 when purchased on January 1, 2011. The equipment was sold for $181,220. June 1 Sold land for $1,705,600. The land cost $1,066,000. July 1 Purchased equipment for $1,172,600. Dec. 31 Retired equipment that cost $746,200 when purchased on December 31, 2008. No salvage value was received.Prepare the plant assets section of Novak’s balance sheet at December 31, 2018.

Answer 1

Plant Assets

Land at Cost $4,477,200

Buildings at Cost $26,610,000

Total $31,087,200

See note 2 below !

Step-by-step explanation:

To determine the Cost of Land, prepare the Land Account

Land T - Account

Debit :

Balance b/d $ 3,198,000

Apr. 1 Cash $2,345,200

Total $5,543,200

Credit :

Disposal $1,066,000

Balance c/d (balance) $4,477,200

Total $5,543,200

Other Notes

1. Remember ,Equipment is not included in the Plant Assets, so do not concern yourself with any transactions of it.

2.Since the depreciation policy for Buildings is not given, I have only recorded the Costs Amount in the Plant Section.