At December 31, 2017, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows CategoryPlant AssetAccumulated Depreciation and AmortizationLand$182,000$Buildings1,850,000335,900Machinery and equipment1,475,000324,500Automobiles and trucks179,000107,325Leasehold improvements230,000115,000Land improvements Depreciation methods and useful lives Buildings150 declining balance 25 years Machinery and equipmentStraight line 10 years Automobiles and trucks150 declining balance 5 years, all acquired after 2014 Leasehold improvementsStraight line Land improvementsStraight line Depreciation is computed to the nearest month and residual values are immaterial Transactions during 2018 and other information On January 6, 2018, a plant facility consisting of land and building was acquired from King Corp in exchange for 32,000 shares of Cord's common stock On this date, Cord's stock had a fair value of $60 a share Current assessed values of land and building for property tax purposes are $246,000 and $574,000, respectively On March 25, 2018, new parking lots, streets, and sidewalks at the acquired plant facility were completed at a total cost of $234,000 These expenditures had an estimated useful life of 12 years The leasehold improvements were completed on December 31, 2014, and had an estimated useful life of eight years The related lease, which would terminate on December 31, 2020, was renewable for an additional four year term On April 30, 2018, Cord exercised the renewal option On July 1, 2018, machinery and equipment were purchased at a total invoice cost of $332,000 Additional costs of $11,000 for delivery and $57,000 for installation were incurred On August 30, 2018, Cord purchased a new automobile for $13,200 On September 30, 2018, a truck with a cost of $24,700 and a book value of $10,400 on date of sale was sold for $12,200 Depreciation for the nine months ended September 30, 2018, was $2,340 On December 20, 2018, a machine with a cost of $20,500 and a book value of $3,150 at date of disposition was scrapped without cash recovery Required 1 Prepare a schedule analyzing the changes in each of the plant asset accounts during 2018 Do not analyze changes in accumulated depreciation and amortization 2 For each asset category, prepare a schedule showing depreciation or amortization expense for the year ended December 31, 2018

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 27, 2024

At December 31, 2017, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows: CategoryPlant AssetAccumulated Depreciation and AmortizationLand$182,000$Buildings1,850,000335,900Machinery and equipment1,475,000324,500Automobiles

At December 31, 2017, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows:

CategoryPlant AssetAccumulated Depreciation

and AmortizationLand$182,000$Buildings1,850,000335,900Machinery and equipment1,475,000324,500Automobiles and trucks179,000107,325Leasehold improvements230,000115,000Land improvements

Depreciation methods and useful lives:

Buildings150% declining balance; 25 years.

Machinery and equipmentStraight line; 10 years.

Automobiles and trucks150% declining balance; 5 years, all acquired after 2014.

Leasehold improvementsStraight line.

Land improvementsStraight line.

Depreciation is computed to the nearest month and residual values are immaterial. Transactions during 2018 and other information:

On January 6, 2018, a plant facility consisting of land and building was acquired from King Corp. in exchange for 32,000 shares of Cord's common stock. On this date, Cord's stock had a fair value of $60 a share. Current assessed values of land and building for property tax purposes are $246,000 and $574,000, respectively.
On March 25, 2018, new parking lots, streets, and sidewalks at the acquired plant facility were completed at a total cost of $234,000. These expenditures had an estimated useful life of 12 years.
The leasehold improvements were completed on December 31, 2014, and had an estimated useful life of eight years. The related lease, which would terminate on December 31, 2020, was renewable for an additional four-year term. On April 30, 2018, Cord exercised the renewal option.
On July 1, 2018, machinery and equipment were purchased at a total invoice cost of $332,000. Additional costs of $11,000 for delivery and $57,000 for installation were incurred.
On August 30, 2018, Cord purchased a new automobile for $13,200.
On September 30, 2018, a truck with a cost of $24,700 and a book value of $10,400 on date of sale was sold for $12,200. Depreciation for the nine months ended September 30, 2018, was $2,340.
On December 20, 2018, a machine with a cost of $20,500 and a book value of $3,150 at date of disposition was scrapped without cash recovery.

Required:

1.Prepare a schedule analyzing the changes in each of the plant asset accounts during 2018. Do not analyze changes in accumulated depreciation and amortization.

2.For each asset category, prepare a schedule showing depreciation or amortization expense for the year ended December 31, 2018.