Question
The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2015: Plant Asset Accumulated Depreciation Land $ 395,000
The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2015:
Plant Asset | Accumulated Depreciation | |||||
Land | $ | 395,000 | $ | 0 | ||
Land improvements | 193,500 | 54,000 | ||||
Building | 1,590,000 | 395,000 | ||||
Machinery and equipment | 1,248,000 | 450,000 | ||||
Automobiles | 159,000 | 116,500 | ||||
Transactions during 2016 were as follows: | |
a. | On January 2, 2016, machinery and equipment were purchased at a total invoice cost of $305,000, which included a $6,400 charge for freight. Installation costs of $36,000 were incurred. |
b. | On March 31, 2016, a machine purchased for $67,000 in 2012 was sold for $41,000. Depreciation recorded through the date of sale totaled $28,475. |
c. | On May 1, 2016, expenditures of $59,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather. |
d. | On November 1, 2016, 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 $47 per share. Pell paid legal fees and title insurance totaling $27,500. Shortly after acquisition, the building was razed at a cost of $44,000 in anticipation of new building construction in 2017. |
e. | On December 31, 2016, Pell purchased a new automobile for $17,500 cash and trade-in of an old automobile purchased for $22,500 in 2012. Depreciation on the old automobile recorded through December 31, 2016, totaled $16,875. The fair value of the old automobile was $4,200. |
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. (Do not round intermediate calculations.)
What is depreciation expense for: land improvementss, building, mahcinery and equipment, automobiles
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