The plant asset and accumulated depreciation accounts of Pell Corporation had th
ID: 2531296 • Letter: T
Question
The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2015:
On January 2, 2016, machinery and equipment were purchased at a total invoice cost of $215,000, which included a $4,600 charge for freight. Installation costs of $18,000 were incurred.
On March 31, 2016, a machine purchased for $49,000 in 2012 was sold for $32,000. Depreciation recorded through the date of sale totaled $20,825.
On May 1, 2016, expenditures of $41,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather.
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 $29 per share. Pell paid legal fees and title insurance totaling $18,500. Shortly after acquisition, the building was razed at a cost of $26,000 in anticipation of new building construction in 2017.
On December 31, 2016, Pell purchased a new automobile for $13,000 cash and trade-in of an old automobile purchased for $13,500 in 2012. Depreciation on the old automobile recorded through December 31, 2016, totaled $10,125. The fair value of the old automobile was $3,300.
For each asset classification, prepare a schedule showing depreciation for the year ended December 31, 2016, using the following depreciation methods and useful lives:
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, 2016.
Land Improvements $_______
Building $_________
Machinery & Equipment $________
Auto Mobiles $_____________
Total Depreciation Expense of 2016 $___________
***I only have about 45 minutes to complete this. Please help***
The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2015:
Explanation / Answer
Depreciation for land improvements = 166500*6.67% =11106
Depreciation rate = 1/15 =6.67%
Depreciation for building = (1410000-305000)*7.5%= 82875
Depreciation rate = 150%/20 =7.5%
Depreciation for machinery & equipment = (1068000-49000)*10% + (233000*10%) + (49000*10%*3/12) =101900+23300+1225 = 126425
Depreciation for automobiles = (141000-107500)*50% = 16750
Land improvements 11106 Buildings 82875 Machinery and equipment 126425 Automobiles 16750 Total depreciation 237156