The plant asset and accumulated depreciation accounts of Pell Corporation had th
ID: 2570342 • Letter: T
Question
The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2015: Accumulated Plant A S 520.000 Depreciat Land Land improvements Building Machinery and 62.000 2.350,000367.000 1.192,000 422,000 235,000129,000 265,000 equipment Automobiles Transactions during 2016 were as follows a. On anuary 2 2016, machinery and equipment were purchased at a total invoice cost of $345,000 which included a $7 200 charge for freight Installation costs of 544 000 were incurred recorded through the date of sale totaled $27 200 work was necessitated by damage caused by severe winter weather b On March 31 2016, a machine purchased for $75,000 in 2012 was sold for $53,500. Depreciation c On May 1 2016, expenditures of $67 000 were made to repave parking lots at Pel's plant location The d. On November 1, 2016. Pell acquired a tract of land with an existing building in exchange for 10,000 insurance totaling $40 000 Shortly after acquisition, the building was razed at a cost of $52 000 in anticipation of new building construction in 2017 On December 31,2016 Pell purchased a new automobile for $16 950 cash and trade-in of an old automobile purchased for $26 500 in 2012 Depreclation on the old automobile recorded through December 31 2016, totaled $15200 The fair value of the old aultomobile was 55 450 Required: 1. Prepare a sichedule analy eing the changes in each of the plant assets during 2016Explanation / Answer
Pell Corporation Analysis of changes in Plant Assets For the Year Ended Dec 31st, 2016 Balance Balance 31/12/2015(A) Increase(B) Decrease(C ) 31/12/2016=(A)+(B)-(C ) Land $ 520,000.00 482000 $ 1,002,000.00 Land Improvement $ 265,000.00 $ 265,000.00 Building $ 2,350,000.00 $ 2,350,000.00 Machinery & Equipment $ 1,192,000.00 $ 345,000.00 $ 75,000.00 $ 1,462,000.00 Automobiles $ 235,000.00 $ 22,400.00 $ 26,500.00 $ 230,900.00 Totals Journal Entries Particular Amount (DR) Amount (CR) a) Machinery & Equipment($7200+$44000+($345000-$7200-$44000) $ 345,000.00 To Cash $ 345,000.00 b) Cash $ 53,500.00 Accumulated Depreciation $ 27,200.00 To Machinery & Equipment $ 75,000.00 To Gain on sale =($75000-$53500-$27200) $ 5,700.00 c ) Repairs Expense $ 67,000.00 To Cash $ 67,000.00 d) Land=(10000*$39)+$40000+$52000 $ 482,000.00 To Cash $ 482,000.00 e) Automobile(New)=($16950+$5450) $ 22,400.00 Accumulated Depreciation $ 15,200.00 Loss on Exchange $ 5,850.00 To Automobile(Old) $ 26,500.00 To Cash $ 16,950.00 PELL CORPORATION Gain or Loss from Plant Assets Disposals For the Year Ended December 31st,2016 Sale of Machine on 31/03/2016 Selling Price of Machinery sold $ 53,500.00 Less: Book Value=(Cost -Accumulated Dep)=($75000-$27200) $ 47,800.00 Gain on sale of machinery $ 5,700.00 Trade-in of automobile on 31/12/2016 Fair Market Value $ 5,450.00 Less: Book Value=(Cost-Accumulated Dep)=($26500-$15200) $ 11,300.00 Loss on exchange $ (5,850.00)