Pell Corporations Property, Plant, and Equipment and Accumulated Depreciation accounts had the following balances at December 31,

Question:

Pell Corporation€™s Property, Plant, and Equipment and Accumulated Depreciation accounts had the following balances at December 31, 2015:

Depreciation method and useful lives:
€¢ Land improvements: Straight- line; 15 years.
€¢ Building: 150%- declining- balance; 20 years.
€¢ Machinery and equipment: Straight- line; 10 years.
€¢ Automobiles: 150%- declining- balance; 3 years.
€¢ Depreciation is computed to the nearest month. No salvage values are recognized.
Transactions during 2016:
1. On January 2, 2016, machinery and equipment were purchased at a total invoice cost of $ 260,000, which included a $ 5,500 charge for freight. Installation costs of $ 27,000 were incurred.
2. On March 31, 2016, a machine purchased for $ 58,000 on January 3, 2012, was sold for $ 36,500.
3. On May 1, 2016, expenditures of $ 50,000 were made to repave parking lots at Pell€™s plant location. The work was necessitated by damage caused by severe winter weather.
4. On November 2, 2016, Pell acquired a tract of land with an existing building in exchange for 10,000 shares of Pell€™s $ 20 par common stock, which had a market price of $ 38 a share on this date. Pell paid legal fees and title insurance totaling $ 23,000. The last property tax bill indicated assessed values of $ 240,000 for land and $ 60,000 for building. Shortly after acquisition, the building was razed at a cost of $ 35,000 in anticipation of new building construction in 2017.
5. On December 31, 2016, Pell purchased a new automobile for $ 15,250 cash and trade- in of an automobile purchased for $ 18,000 on January 1, 2015. The new automobile has a cash value of $ 19,000.
Required:
1. Prepare a schedule analyzing the changes in each of the plant assets during 2016, with detailed supporting computations. Disregard the related Accumulated Depreciation accounts.
2. For each asset classification, prepare a schedule showing depreciation expense for the year ended December 31, 2016.
3. Prepare a schedule showing the gain or loss from each asset disposal that Pell would recognize in its income statement for the year ended December 31, 2016.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...