Question

Selected accounts included in the property, plant, and equipment section of Whispering Corporation's balance sheet at December 31, 2016, had the following balances. Land Land improvements 170,800 Buildings Equipment $ 366,000 1,342,000 1,171,200 During 2017, the following transactions occurred. 1. 2. Atract of land was acquired for $183,000 as a potential future building site. A plant facility consisting of land and building was acquired from Mendota Company in exchangefor 24,400 shares of Whispering's common stock. On the acquisition date, Whispering's stock had a closing market price of $ 37 per share on a national stock exchange. The plant facility was carried on Mendota's books a respectively, are $ 280,600 and $ 841,800. 134,200 for land and $ 390,400 for the building at the exchange date. Current appraised values for the land and building, 3. Items of machinery and equipment were purchased at a total cost of $488,000. Additional costs were incurred as follows Freight and unloading Sales taxes Installation $15,860 24,400 31,720 4. Expenditures totaling $115,900 were made for new parking lots, streets, and sidewalks at the corporation's various plant locations. These expenditures had an estimated useful life of 15 years. 5. A machine costing$ 97,600 on January 1,2009, was scrapped on June 30, 2017. Double-declining-balance depreciation has been recorded on the basis of a 10-year life 6. A machine was sold for $24,400 on July 1, 2017. Original cost of the machine was $ 53,680 on January 1,2014, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a salvage value of$ 2,440 (a) Calculate the balance at December 31, 2017 in each of the following balance sheet accounts. (Hint: Disregard the related accumulated depreciation accounts.) Balance at December 31, 2017 Land Land Improvements$ Buildings Equipment

Answer 1

Calculation of Fair Value of plant facility acquired from Mendota Company 35 36 37 38 39 40 41 42 43 24,400 shares of Lobbo Common Stock at $37 Allocation to land & building acounts in proportion to appraised value at the exchange date 902,800 % of total Allocation Land Building Total 280,600 841,800 1,122,400 25.00% 225.700 677.100 902,800 (902800*25%) (9028007596) 45 47 Whispering Corporation ANALYSIS OF LAND ACCOUNT 2017 49 50 51 52 53 54 Balance at january 1,2016 Plant facility acquired from Mendota Company Balance at December 31,2017 366,000 225,700 591,700 Whispering Corporation ANALYSIS OF LAND IMPROVEMENTS ACCOUNT 2017 56 57 58 59 Balance at january 1,2016 Parking lots, streets, and sidewalks Balance at December 31,2017 170,800 115,900 286,700

Whispering Corporation 62 63 64 ANALYSIS OF BUILDING ACCOUNT 2017 Balance at january 1,2016 Plant facility acquired from Mendota Company Balance at December 31,2017 1,342,000 677,100 2,019,100 Whispering Corporation 70 71 72 73 74 75 76 ANALYSIS OF MACHINERY AND EQUIPMENT ACCOUNT 2017 Balance at january 1,2016 Cost of new machinery and equipment acquired Invoice price Freight and unloading costs Sales taxes Installation costs 1,171,200 488,000 15,860 24,400 31,720 559,980 1,731,180 79 Less cost of machines disposed of Machine scrapped June 30 Machine sold July 1 Balance at December 31,2017 97,600 53,680 81 82 83 84 85 (151,280) 1,579,900