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Fill in the blanks and show the calculation The property, plant, and equipment accounts for Pearl Company held the following opening balances on January 1,
Fill in the blanks and show the calculation
The property, plant, and equipment accounts for Pearl Company held the following opening balances on January 1, 2017 (the first day of Pearls fiscal year):
Land | $584,000 | |
Equipment | 802,000 | |
Accumulated DepreciationEquipment | 122,000 | |
Machinery | 448,000 | |
Accumulated DepreciationMachinery | 166,000 |
The following transactions took place during 2017 (assume all transactions took place on January 1):
a. | Pearl Company paid $18,500 related to the machinery and $7,500 related to the equipment for maintenance to keep the assets in normal working order. | |
b. | Equipment with an original cost of $37,300 and accumulated depreciation of $31,700 was traded in on some new equipment. The new equipment had a fair value of $54,300, and Pearl was given a trade in allowance of $4,400 for the old equipment. | |
c. | Pearl Company made an agreement with GRN Ltd. to exchange two similar plots of land. Pearls land had an original cost of $584,000 and a fair value of $771,000. GRNs land had an original cost of $607,100 and a fair value of $809,700. Pearl also paid $38,700 in cash to GRN as part of the transaction. The exchange lacks commercial substance. | |
d. | Pearl paid $66,100 on a major upgrade to some of the equipment that significantly increased the economic life of the equipment.
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