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The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2012: Plant Asset Accumulated Depreciation Land 370,000 0
The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2012: | ||
Plant Asset | Accumulated | |
Depreciation | ||
Land | 370,000 | 0 |
Land improvements | 186,000 | 49,000 |
Building | 1,540,000 | 370,000 |
Machinery and equipment | 1,198,000 | 425,000 |
Automobiles | 154,000 | 114,000 |
Transactions during 2013 were as follows: | ||
A- On January 2, 2013, machinery and equipment were purchased at a total invoice cost of $280,000, which included a $5,900 charge for freight. Installation costs of $31,000 were incurred. | ||
B - On March 31, 2013, a machine purchased for $62,000 in 2009 was sold for $38,500. Depreciation recorded through the date of sale totaled $26,350. | ||
C - On May 1, 2013, expenditures of $54,000 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, 2013, 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 $42 per share. Pell paid legal fees and title insurance totaling $25,000. Shortly after acquisition, the building was razed at a cost of $39,000 in anticipation of new building construction in 2014. | ||
E - On December 31, 2013, Pell purchased a new automobile for $16,250 cash and trade-in of an old automobile purchased for $20,000 in 2009. Depreciation on the old automobile recorded through December 31, 2013, totaled $15,000. The fair value of the old automobile was $3,950. | ||
Required: | ||
For each asset classification, prepare a schedule showing depreciation expense for the year ended December 31, 2013, 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.) | ||
PELL CORPORATION | ||
Depreciation Expense | ||
For the Year Ended December 31, 2013 | ||
Land Improvements..................? | ||
Building.....................................? | ||
Machinery and equipment.........? | ||
Automobiles..............................? | ||
Total depreciation expense for 2013....? | ||
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