The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December...
The plant asset and
accumulated depreciation accounts of Pell Corporation had the
following balances at December 31, 2020:
| Plant Asset |
Accumulated Depreciation |
|||||
| Land | $ | 450,000 | $ | — | ||
| Land improvements | 230,000 | 55,000 | ||||
| Building | 2,000,000 | 360,000 | ||||
| Equipment | 1,178,000 | 415,000 | ||||
| Automobiles | 200,000 | 122,000 | ||||
Transactions during 2021 were as follows:
- On January 2, 2021, equipment were purchased at a total invoice cost of $310,000, which included a $6,500 charge for freight. Installation costs of $37,000 were incurred.
- On March 31, 2021, a small storage building was donated to the company. The person donating the building originally purchased it three years ago for $29,000. The fair value of the building on the day of the donation was $19,500.
- On May 1, 2021, expenditures of $60,000 were made to repave parking lots at Pell’s plant location. The work was necessitated by damage caused by severe winter weather. The repair doesn’t provide future benefits beyond those originally anticipated.
- On November 1, 2021, 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 $38 per share. Pell paid legal fees and title insurance totaling $33,000. Shortly after acquisition, the building was razed at a cost of $45,000 in anticipation of new building construction in 2022.
- On December 31, 2021, Pell purchased a small storage building by giving $16,250 cash and an old automobile purchased for $23,000 in 2014. Depreciation on the old automobile recorded through December 31, 2021, totaled $14,500. The fair value of the old automobile was $4,750.
Required:
Prepare a schedule analyzing the changes in each of the plant
assets during 2021.
Homework Answers
| PELL CORPORATION | ||||
| Analysis of Changes in Plant Assets | ||||
| For the Year Ended December 31, 2021 | ||||
| Balance | Balance | |||
| 12/31/2020 | Increase | Decrease | 12/31/2021 | |
| Land | 450000 | 458000 | 908000 | |
| Land improvements | 230000 | 230000 | ||
| Building | 2000000 | 19500 | 2040500 | |
| 21000 | ||||
| Equipment | 1178000 | 347000 | 1525000 | |
| Automobiles | 200000 | 23000 | 177000 | |
| Totals | 4058000 | 845500 | 23000 | 4880500 |
Working:
| a. Increase in Equipment = $310000 + $37000 = $347000 |
| b. Increase in Building = $19500 (fair value on day of donation) |
| c. Repaving of parking lots is a repairs expense and is not capitalized since it does not provide future benefits. |
| d. Increase in Land = (10000 x $38) + $33000 + $45000 = $458000 |
| e. Decrease in automobile = Cost of old automobile = $23000 |
| e. Increase in Building = Fair value of old automobile + Cash paid = $4750 + $16250 = $21000 |
Add Answer to:
The plant asset and
accumulated depreciation accounts of Pell Corporation had the
following balances at December...
The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December...
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The plant asset and accumulated depreciation accounts of Pell Corporation had the following balances at December 31, 2012 Plant Asset 315,000 169,568 Land Land improvements Building Machinery and equipment Automobiles 38,009 1,43e,e0e 315,e0e 1,688,00378,809 1e8,580 143,000 Transactions during 2018 were as follows a On January 2, 2018, machinery and equipment were purchased at a total invoice cost of $225,000, which included a $4.800 b. On March 31, 2018, a small storage building was donated to the company The person donating...
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