Accounting 3110 Case Study #2 . Chapter 10 Problem THE WILDCAT COMPANY The plant

Question

Accounting 3110 Case Study #2 . Chapter 10 Problem THE WILDCAT COMPANY The plant asset and accumulated depreciation accounts of the Wildcat Company had the following 5 balances at December 31, 2016: Plant Assets 8 Land 530,000 Land improvements Building Machinery and equipment 270,000 63,000 1.194,000 423,000 12 Automobiles 130,000 Transactions during 2017 were as followed: A. On January 2, 2017, machinery and equipment were purchased at a total invoice cost of $350,000. which included a $7.300 charge for freight. Installation costs of $45.000 were incurred. B. On March 31, 2017, a machine purchased for $76,000 in 2013 was sold for $54,500 Depreciation recorded through the date of sale totaled $27,350. C. On May 1, 2017, expenditures of $68,000 were made to repave parking lots at Willdcat's plant location. The work was necessitated by damage caused by severe winter weather D. On November 1., 2017, Wildcat Company acquired a tract of land with an existing building in exchange for 10,000 shares of Wildcat Company's common stock that had a market price of $40 per share. Wildcat Company paid legal fees and title insurance totaling $41,000. Shortly after acquisition, the building was razed at a cost of $53,000 in anticipation of new building construction in 2018. On December 31, 2017, Wildcat Company purchased a new automobile for $17,050 cash and trade-in of an old automobile purchased for $27,000 in 2013. Depreciation on the old automobile recorded through December 31, 2017, totaled $15,300. The fair value of the old automobile was 5,550 E. 21 Requirement 1: Prepare a schedule analyzing the changes in each of the plant assets during 2017.This schedule analyzes the costs recorded to each asset account and does NOT take into account accumulated

Explanation / Answer

Answer 1. Balance 12/31/2016 Increase Decrease Balance 12/31/2017 Land        530,000.00    494,000.00                     -      1,024,000.00 Land & Improvements        270,000.00                     -                       -          270,000.00 Buildings    2,400,000.00                     -                       -      2,400,000.00 Machinery & Equipment    1,194,000.00    395,000.00      76,000.00    1,513,000.00 Automobiles        240,000.00      22,600.00      27,000.00        235,600.00 Total    4,634,000.00    911,600.00    103,000.00    5,442,600.00 Increase in Land = ($40 X 10,000 shares) + $41,000 + $53,000 = $494,000 Increase in Machinery & Equipment = $350,000 + $45,000 = $395,000 Decrease in Machinery & Equipment = Increase in Machinery & Equipment = $17,050 + $5,550 = $22,600

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