value 10.00 points The plant asset and accumulated depreciation accounts of Pel
ID: 2488964 • Letter: V
Question
value 10.00 points The plant asset and accumulated depreciation accounts of Pel Corporation had the following balances at December 31, 2015 Plant Asset $330,000 $ Land 174,000 41,000 Building ,460.000330,000 Machinery and equipment 1,118,000 385,000 110,000 Automobiles 146,000 Transactions during 2016 were as follows: a. On January 2, 2016, machi nery and equipment were purchased at a total invoice cost of $240.000, which included a $5,100 charge for freight. Installation costs of $23,000 were incurred. b. On March 31, 2016, a machine purchased for $54,000 in 2012 was sold for $34,500. Depreciation recorded through the date of sale totaled $22,950 c. On May 1, 2016, expenditures of $46,000 were made to repave parking lots at Pel's plant location. The work was necessitated by damage caused by severe winter weather. d. On November 1, 2016, Pell acquired a tract of land with an existing building in exchange for 10,000 shares of Pelrs common stock that had a market price of $34 per share. Pell paid legal fees and title insurance totaling $21,000. Shortly after acquisition, the building was razed at a cost of $31,000 in anticipation of new building construction in 2017 e. On December 31,2016, Pell purchased a new automobile for $14,250 cash and trade-in of an old automobile purchased for $16,000 in 2012. Depreciation on the old automobile recorded through December 31, 2016, totaled $12,000. The fair value of the old automobile was $3,550. Required: For each asset classification, prepare a schedule showing depreciation for the year ended December 31, 2016, using the following depreciation methods and useful lives: Land improvements-Straight line; 15 years. Building-_150% declining balance; 20 years. Machinery and equipment-Straight line; 10 years. Automobiles-150% decining balance; 3 years. Depreciation is computed to the nearest month and no residual values are used. (Do not round intermediate calculations.)Explanation / Answer
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Pell Corporation Analysis of Changes in Plant Assets For the Year Ended December 31, 2016 Balance Increase Decrease Balance Land 330000 392000 722000 Land improvements 174000 174000 Building 1460000 1460000 Machinery and equipment 1118000 268100 54000 1332100 Automobiles 146000 30250 15550 160700 Total . 3228000 690350 69550 3848800Related Questions
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