PELL CORPORATION

Plant asset and accumulated depreciation accounts

Plant

Accumulated

Balances at December 31, 2015:

Assets

Depreciation

Land

$ 350,000

$ -

Land improvements

180,000

45,000

Building

1,500,000

350,000

Machinery and equipment

1,158,000

405,000

Automobiles

150,000

112,000

Transactions during 2016:

Machinery and equipment purchase

$ 260,000

Freight charge (included in purchase price above)

$ 5,500

Installation costs

$ 27,000

Machine purchase, 2012

$ 58,000

Machine selling price, 2016

$ 36,500

Depreciation through date of sale

$ 24,650

Repaving cost

$ 50,000

Common shares exchanged for land

10,000

Market price per share

$ 38

Legal fees and title insurance

$ 23,000

Cost to raze building

$ 35,000

New automobile cost

$ 15,250

Old automobile cost

$ 18,000

Old automobile depreciation

$ 13,500

Old automobile fair value

$ 3,750

Useful Life

Depreciation

(years)

Method

Land improvements

15

Straight-line

Building

20

150% Declining balance

Machinery and equipment

10

Straight-line

Automobiles

3

150% Declining balance

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 improvementsStraight line; 15 years.

Building150% declining balance; 20 years.

Machinery and equipmentStraight line; 10 years.

Automobiles150% declining balance; 3 years.

Depreciation is computed to the nearest month and no residual values are used.

	PELL CORPORATION
	Depreciation Expense
	For the Year Ended December 31, 2016
	Land Improvements
	Cost
	Straight-line rate
	Building:
	Book value 12/31/2015
	150% declining balance rate
	Machinery and Equipment:
	Balance, 12/31/2015
	Deduct machine sold
	Straight-line rate
	Purchased 1/2/2016
	Depreciation
	Machine sold 3/31/2016
	Depreciation for three months
	Total depreciation on machinery and equipment
	Automobiles:
	Book value on 12/31/2015
	150% declining balance rate
	Total depreciation expense for 2016