Problem 10-3 Acquisition costs [LO10-1, 10-4, 10-6]

The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2017:

	Plant Asset			Accumulated Depreciation
Land	$	540,000		$
Land improvements		275,000			64,000
Building		2,450,000			369,000
Machinery and equipment		1,196,000			424,000
Automobiles		245,000			131,000

Transactions during 2018 were as follows:

1. On January 2, 2018, machinery and equipment were purchased at a total invoice cost of $355,000, which included a $7,400 charge for freight. Installation costs of $46,000 were incurred.
2. On March 31, 2018, a small storage building was donated to the company. The person donating the building originally purchased it three years ago for $38,000. The fair value of the building on the day of the donation was $24,000.
3. On May 1, 2018, expenditures of $69,000 were made to repave parking lots at Pells plant location. The work was necessitated by damage caused by severe winter weather.
4. On November 1, 2018, Pell acquired a tract of land with an existing building in exchange for 10,000 shares of Pell's common stock that had a market price of $36 per share. Pell paid legal fees and title insurance totaling $42,000. Shortly after acquisition, the building was razed at a cost of $54,000 in anticipation of new building construction in 2019.
5. On December 31, 2018, Pell purchased a small storage building by giving $17,150 cash and an old automobile purchased for $27,500 in 2014. Depreciation on the old automobile recorded through December 31, 2018, totaled $15,400. The fair value of the old automobile was $5,650.

Required: Prepare a schedule analyzing the changes in each of the plant assets during 2018.

PELL CORPORATION Analysis of Changes in Plant Assets For the Year Ended December 31, 2018 Balance 12/31/2017 $ 540,000 Balance Increase Decrease 12/31/2018 Land Land improvements Building 275,000 2,450,000 Machinery and equipment Automobiles 1,196,000 245,000 $ 4,706,000 $ Totals