Question

At December 31, 2020, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows: Accunulated Depreciation and Anortization Category Land Plant Asset $ 184,000 Buildings Equipment Automobiles and trucks Leasehold improvements Land improvements 1,950,000 1,575,000 181,000 234,000 337,900 326,500 109,325 117,000 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: a. On January 6, 2021, a plant facility consisting of land and building was acquired from King Corp. in exchange for 34,000 shares of Cord's common stock. On this date, Cord's stock had a fair value of $50 a share. Current assessed values of land and building for property tax purposes are $210,000 and $630,000, respectively. b. On March 25, 2021, new parking lots, streets, and sidewalks at the acquired plant facility were completed at a total cost of $246,000. These expenditures had an estimated useful life of 12 years. c. 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. d. On July 1, 2021, equipment was purchased at a total invoice cost of $334,000. Additional costs of $10,000 for delivery and $59,000 for installation were incurred. e. On September 30, 2021, Cord purchased a new automobile for $13,400. f. On September 30, 2021, a truck with a cost of $24,900 and a book value of $10,800 on date of sale was sold for $12,400. Depreciation for the nine months ended September 30, 2021, was $2,430. g. On December 20, 2021, equipment with a cost of $21,500 and a book value of $3,200 at date of disposition was scrapped without

Answer 1

Answeg - Page No ① Schedule analyzing the changes in each of plan get accounts during 2001 hand Allocation of land & building accountó to proportion) to appraised values at Exchange rate 2. of land - 010,000_ X1oo : 25% 210,000 +630,000 Yo of building 630,000_ 7100 - 7544 210,000+630,000 fair value of plant facilily acquired from hing company - 34000 shares Ⓡ$50 = $1400,000 Total Land value o 254 x 1400,000 = $425000 Total building value = 754. X 1400,000 =$1245000

Page No coof new machinery & equipment Acquired invoice price - $334000 freight & unloading cortos - $10,000 Innfallation costos - $59000 Total = $334000 + $10,000 + $59000 = $ 403000 I Balance Dosease | Decrease Land Balance 12/31/20 herease 12131121 $184000 $425000 * 609000 Land improvements - *246000 - 6246000 Building 1950,000 $1045000 - $3225000 Equipment #1545000 $403000 $21500$1956500 Avtomobiles E trucks 4 181000 613400 $34900 € 169500 Leasehold improvements $234000 $234000 $4124000 $2362400 $46400 A 6440000

Page No ® Uloxcaation www montiaahon cxpense unau un ndeel deest uu uu . 2001: - Depreciation en land improvement – (2460 x Högre) * = $15375 7:3/25 40123) Depreciation expense of building (10.co-3 48016000 E x la seva x150% = (1612100 + 1275000) x (as XIS) = 2887100 Xs x 15 e $143026 Depreciations for machinery Ę equiproent = 1575000 + 403000 10 years 2x10 years = 157500 + 20150 = $.147650

Page: No 4 - Automobiles & bucks, Book value = 181000 -109325 $ 71675 Dedud ilular book value of truck sold on 9/30 = 12400++ 2430 = $14830 Amount Subject to depreciation = 1645 -14830 : $ 56845 declining balance rate. - 150%, declining balance orate = otra X150%) = 20-%. X115 5yrs = 30% Depreciation for 2021 = 13400 x (304x4) = 13400 x 10% $1340 Depreciation on automobiles E trucks (56845 X30 7.)-1340 +2430 = $20824

Page: No 6 Amortization of leasehold improvements for 2021 = @ 34000 -11 1000 5 yeans = $03400 Particular Amount Land improvements $15375 Building $143226 $147650 Equipment Automobiles & trucks $ 20834 Leasehold improvements $ 23400 Total depreciation e amortization $ 410445