Question

Re-posting for the 3rd time...this is one question...can someone please help? Thank you.

Reposting this question for a 2nd time...please help!

Question: Hello, Can you please help with this question and give an explanation for the correct answer?&nbs...

Hello,

Can you please help with this question and give an explanation for the correct answer? Thank you.

At December 31, 2020, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows:

Category	Plant Asset				Accumulated Depreciation and Amortization
Land	$	168,000			$	—
Buildings		1,150,000				321,900
Equipment		775,000				310,500
Automobiles and trucks		165,000				93,325
Leasehold improvements		202,000				101,000
Land improvements		—				—

Depreciation methods and useful lives:
Buildings—150% declining balance; 25 years.
Equipment—Straight line; 10 years.
Automobiles and trucks—200% declining balance; 5 years, all acquired after 2017.
Leasehold improvements—Straight line.
Land improvements—Straight line.

Depreciation is computed to the nearest month and residual values are immaterial. Transactions during 2021 and other information:

1. On January 6, 2021, a plant facility consisting of land and building was acquired from King Corp. in exchange for 18,000 shares of Cord's common stock. On this date, Cord's stock had a fair value of $40 a share. Current assessed values of land and building for property tax purposes are $136,000 and $544,000, respectively.
2. On March 25, 2021, new parking lots, streets, and sidewalks at the acquired plant facility were completed at a total cost of $150,000. These expenditures had an estimated useful life of 12 years.
3. The leasehold improvements were completed on December 31, 2017, and had an estimated useful life of eight years. The related lease, which would terminate on December 31, 2023, was renewable for an additional four-year term. On April 30, 2021, Cord exercised the renewal option.
4. On July 1, 2021, equipment was purchased at a total invoice cost of $318,000. Additional costs of $12,000 for delivery and $43,000 for installation were incurred.
5. On September 30, 2021, Cord purchased a new automobile for $11,800.
6. On September 30, 2021, a truck with a cost of $23,300 and a book value of $7,800 on date of sale was sold for $10,800. Depreciation for the nine months ended September 30, 2021, was $1,755.
7. On December 20, 2021, equipment with a cost of $13,500 and a book value of $2,800 at date of disposition was scrapped without cash recovery.

Required:

1. Prepare a schedule analyzing the changes in each of the plant asset accounts during 2021. Do not analyze changes in accumulated depreciation and amortization.
2. For each asset category, prepare a schedule showing depreciation or amortization expense for the year ended December 31, 2021.

THOMPSON CORPORATION Fixed Asset and Depreciation Schedule For Fiscal Years Ended September 30, 2020, and September 30, 2021 Acquisition Date Assets Depreciation for Year Ended 9/30 Cost Depreciation Method Residual Estimated Life in Years 2021 ΝΙΑ N/A | $ NA Land A Building A Land B Building B Donated Equipment Equipment A Equipment B N/A 10/1/2019 10/1/2019 10/2/2019 Under construction 10/2/2019 10/2/2019 10/1/2020 2020 NA 14,400 NA - DNA $ 61,650 NA 250,000 to date 2,400 4.800 not applicable Straight-line not applicable Straight-line 200% Declining balance Sum-of-the years'-digits Straight-line 30

Answer 1

Requirement 1
Cord Company
ANALYSIS OF CHANGES IN PLANT ASSETS
For the Year Ending December 31, 2021
	Balance			Balance
	12/31/20	Increase	Decrease	12/31/21
Land (Schedule -1)	$                    168,000.00	$144,000.00		$            312,000.00
Land improvements	$                                  -	$    150,000.00		$            150,000.00
Buildings (Schedule -1)	$                 1,150,000.00	$576,000.00		$         1,726,000.00
Equipment ((Schedule -2)	$                    775,000.00	$373,000.00	$       13,500.00	$         1,134,500.00
Automobiles and trucks	$                    165,000.00	$      11,800.00	$       23,300.00	$            153,500.00
Leasehold improvements	$                    202,000.00	$                  -	$                    -	$            202,000.00
	$                 2,460,000.00	$ 1,254,800.00	$       36,800.00	$         3,678,000.00
Schedule 1
Computation of Fair Value of Plant Facility Acquired from King Company and Allocation to Land and Building
18,000 shares of Webb common stock at $40 quoted market price on date of exchange (18,000 X $40)	$720,000.00
Allocation to land and building accounts in proportion to appraised values at the exchange date:
	Market Value	Percentage of total
Land	$136,000.00	20.00%
Building	$544,000.00	80.00%
Total	$680,000.00	100.00%
Land = $720,000 x 20%)	$144,000.00
Building = $720,000 x 80%	$576,000.00
Total	$720,000.00
Schedule 2
ANALYSIS OF MACHINERY AND EQUIPMENT ACCOUNT
Cost of new machinery and equipment
acquired
Invoice price	$318,000.00
Freight and unloading costs	$12,000.00
Installation costs	$43,000.00	$373,000.00
Requirement 2
Cord Company
DEPRECIATION AND AMORTIZATION EXPENSE
For the Year Ended December 31, 2021
Land Improvements	$                        9,375.00
Buildings	$                      84,246.00
Equipment	$                      96,150.00
Automobiles and trucks	$                      21,571.00
Leasehold improvements	$                      20,200.00
Total depreciation and amortization	$                    231,542.00
Land Improvements
Cost	$                    150,000.00
Straight-line rate (1/12 years)	0.083333333
	$                      12,500.00
	x 3/4
Depreciation on land improvements for 2021: (3/25 to 12/31/21	$                        9,375.00
Buildings
Book value, 1/1/21 ($1,150,000 - 321,900)	$                    828,100.00
Building acquired 1/6/21	$576,000.00
Total amount subject to depreciation	$                 1,404,100.00
150% declining balance rate: (1 / 25 years = 4% x 1.5)	6%
Depreciation Expense	$                      84,246.00
Machinery and equipment:
Balance, 1/1/21	$                    775,000.00
Straight-line rate (1 / 10 years)	0.1
		$      77,500.00
Purchased on 7/1/21	$373,000.00
Depreciation for one-half year	0.05	$18,650.00
Total		$      96,150.00
Automobiles and trucks
Book value, 1/1/21 ($165,000 - 93,325)	71675
Deduct 1/1/21 book value of truck sold on 9/30 ($7800 + 1755)	9555
Amount subject to depreciation	62120
150% declining balance rate: (1 / 5 years = 20% x 1.5)	30%
		$      18,636.00
Automobile purchased 8/30/21	11800
Depreciation for 2021 (30% x 4/12)	10%	$        1,180.00
Truck sold on 9/30/21 - depreciation (given)		$        1,755.00
Depreciation on automobiles and trucks		$      21,571.00
Leasehold improvements
Book value, 1/1/21 ($202,000 - 101,000)	101000
Amortization period (1/1/17 to 12/31/23)	5
Amortization of leasehold improvements for 2021	20200
		Cord Company
		Fixed Assets and Depreciation Schedule
		For the Year Ended December 31, 2021 and  December 31, 2021
Assets	Acquisition Date	Cost	Residual	Depreciation Method	Estimated life in years	Depreciation for year Ended Dec 31
						2021
Land	6-Jan-21	$    312,000.00	0	N/A	N/A	N/A
Land improvements	25-Mar-21	$    150,000.00		Straight line.	12	$        9,375.00
Buildings	30-Apr-21	$ 1,726,000.00		150% declining balance	25	$      84,246.00
Equipment	1-Jul-21	$ 1,134,500.00		Straight line.	10	$      96,150.00
Automobiles and trucks	30-Sep-21	$    153,500.00		200% declining balance	5	$      21,571.00
Leasehold improvements	1-Jan-21	$    202,000.00		Straight line.	8	$      20,200.00