At January 1, 2022, Ivanhoe Company reported the following property, plant, and equipment accounts: Accumulated depreciation—buildings $61,800,000
Accumulated depreciation—equipment 53,200,000
Buildings 97,600,000
Equipment 150,900,000
Land 21,000,000
The company uses straight-line depreciation for buildings and equipment, its year-end is December 31, and it makes adjusting entries 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 $4.00 million. Paid $1.000 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 $270,000 cash. The equipment cost $3.90 million
when originally purchased on January 1, 2014.
June 1 Sold land for $4.20 million. Received $690,000 cash and accepted a 3
-year, 5% note for the balance. The land cost $1.40 million when purchased
on June 1, 2016. Interest on the note is due annually each June 1.
July 1 Purchased equipment for $2.80 million cash.
Dec. 31 Retired equipment that cost $1 million when purchased on December 31,
2012. No proceeds were received.
Required:
1. Record any adjusting entries for depreciation required at December 31. (Credit account titles are automatically indented when the an manually.
2. Prepare the property, plant, and equipment section of the company's statement of financial position at December 31.