Question
Problem 10-2 Selected accounts included in the property, plant, and equipment section of Pearl Corporations balance sheet at December 31, 2016, had the following balances.
Problem 10-2
Selected accounts included in the property, plant, and equipment section of Pearl Corporations balance sheet at December 31, 2016, had the following balances.
Land $438,000
Land improvements 204,400
Buildings 1,606,000
Equipment 1,401,600
During 2017, the following transactions occurred.
1. A tract of land was acquired for $219,000 as a potential future building site.
2. A plant facility consisting of land and building was acquired from Mendota Company in exchange for 29,200 shares of Pearls common stock. On the acquisition date, Pearls stock had a closing market price of $37 per share on a national stock exchange. The plant facility was carried on Mendotas books at $160,600 for land and $467,200 for the building at the exchange date. Current appraised values for the land and building, respectively, are $335,800 and $1,007,400.
3. Items of machinery and equipment were purchased at a total cost of $584,000. Additional costs were incurred as follows.
Freight and unloading $18,980
Sales taxes 29,200
Installation 37,960
4. Expenditures totaling $138,700 were made for new parking lots, streets, and sidewalks at the corporations various plant locations. These expenditures had an estimated useful life of 15 years.
5. A machine costing $116,800 on January 1, 2009, was scrapped on June 30, 2017. Double-declining-balance depreciation has been recorded on the basis of a 10-year life.
6. A machine was sold for $29,200 on July 1, 2017. Original cost of the machine was $64,240 on January 1, 2014, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a salvage value of $2,920.
(a) Calculate the balance at December 31, 2017 in each of the following balance sheet accounts. (Hint: Disregard the related accumulated depreciation accounts.)
Balance at December 31, 2017
Land
$
Land Improvements
$
Buildings
$
Equipment
$
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