At December 31, 2015, Cord Company's plant asset and accumulateddepreciation and amortization accounts had balances as follows:
Category Plant Asset Accumulated Depreciation
and Amortization Land $ 178,000 $ â Buildings 1,650,000 331,900 Machinery andequipment 1,275,000 320,500 Automobiles andtrucks 175,000 103,325 Leaseholdimprovements 222,000 111,000 Landimprovements â â
Depreciation methods and usefullives: Buildingsâ150% decliningbalance; 25 years. Machinery and equipmentâStraightline; 10 years. Automobiles and trucksâ150%declining balance; 5 years, all acquired after 2012. Leasehold improvementsâStraightline. Land improvementsâStraightline.
Depreciation is computed to thenearest month and residual values are immaterial. Transactionsduring 2016 and other information:
a. On January 6, 2016, a plant facility consisting of land andbuilding was acquired from King Corp. in exchange for 28,000 sharesof Cord's common stock. On this date, Cord's stock had a fair valueof $50 a share. Current assessed values of land and building forproperty tax purposes are $195,000 and $585,000, respectively.
b. On March 25, 2016, new parking lots, streets, and sidewalks atthe acquired plant facility were completed at a total cost of$210,000. These expenditures had an estimated useful life of 12years.
c. The leasehold improvements were completed on December 31, 2012,and had an estimated useful life of eight years. The related lease,which would terminate on December 31, 2018, was renewable for anadditional four-year term. On April 29, 2016, Cord exercised therenewal option.
d. On July 1, 2016, machinery and equipment were purchased at atotal invoice cost of $328,000. Additional costs of $10,000 fordelivery and $53,000 for installation were incurred.
e. On August 30, 2016,Cord purchased a new automobile for $12,800. f. On September 30, 2016, a truck with a cost of $24,300 and a bookvalue of $9,600 on date of sale was sold for $11,800. Depreciationfor the nine months ended September 30, 2016, was $2,160.
g. On December 20, 2016, a machine with a cost of $18,500 and abook value of $3,050 at date of disposition was scrapped withoutcash recovery.
Required: 1. Prepare a schedule analyzing the changes in each of the plantasset accounts during 2016. Do not analyze changes in accumulateddepreciation and amortization.
CORD COMPANY Analysis of Changes in Plant Assets For the Year Ending December 31, 2016 Balance Balance 12/31/15 Increase Decrease 12/31/16 Land $178,000 Landimprovements -- Buildings 1,650,000 Machinery and equipment 1,275,000 Automobiles and trucks 175,000 Leasehold improvements 222,000 3,500,000
2. For each asset category, prepare a schedule showing depreciationor amortization expense for the year ended December 31,2013. (Do not round intermediatecalculations.)
CORD COMPANY Depreciation and Amortization Expense For the Year Ending December 31, 2016 LandImprovements Buildings Machinery and equipment Automobiles and trucks Leasehold improvements Totaldepreciation and amortization expense for 2016
At December 31, 2015, Cord Company's plant asset and accumulateddepreciation and amortization accounts had balances as follows: |
Category | Plant Asset | Accumulated Depreciation and Amortization | ||||
Land | $ | 178,000 | $ | â | ||
Buildings | 1,650,000 | 331,900 | ||||
Machinery andequipment | 1,275,000 | 320,500 | ||||
Automobiles andtrucks | 175,000 | 103,325 | ||||
Leaseholdimprovements | 222,000 | 111,000 | ||||
Landimprovements | â | â | ||||
Depreciation methods and usefullives: |
Buildingsâ150% decliningbalance; 25 years. |
Machinery and equipmentâStraightline; 10 years. |
Automobiles and trucksâ150%declining balance; 5 years, all acquired after 2012. |
Leasehold improvementsâStraightline. |
Land improvementsâStraightline. |
Depreciation is computed to thenearest month and residual values are immaterial. Transactionsduring 2016 and other information: |
a. | On January 6, 2016, a plant facility consisting of land andbuilding was acquired from King Corp. in exchange for 28,000 sharesof Cord's common stock. On this date, Cord's stock had a fair valueof $50 a share. Current assessed values of land and building forproperty tax purposes are $195,000 and $585,000, respectively. |
b. | On March 25, 2016, new parking lots, streets, and sidewalks atthe acquired plant facility were completed at a total cost of$210,000. These expenditures had an estimated useful life of 12years. |
c. | The leasehold improvements were completed on December 31, 2012,and had an estimated useful life of eight years. The related lease,which would terminate on December 31, 2018, was renewable for anadditional four-year term. On April 29, 2016, Cord exercised therenewal option. |
d. | On July 1, 2016, machinery and equipment were purchased at atotal invoice cost of $328,000. Additional costs of $10,000 fordelivery and $53,000 for installation were incurred. |
e. | On August 30, 2016,Cord purchased a new automobile for $12,800. |
f. | On September 30, 2016, a truck with a cost of $24,300 and a bookvalue of $9,600 on date of sale was sold for $11,800. Depreciationfor the nine months ended September 30, 2016, was $2,160. |
g. | On December 20, 2016, a machine with a cost of $18,500 and abook value of $3,050 at date of disposition was scrapped withoutcash recovery. |
Required: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1. | Prepare a schedule analyzing the changes in each of the plantasset accounts during 2016. Do not analyze changes in accumulateddepreciation and amortization. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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